Riyadh: Low-cost Saudi carrier flynas has concluded an $8.6 billion (Dh31.57 billion) purchase deal with Airbus, a major shareholder said on Thursday, as competition grows in the kingdom’s expanding market.

Kingdom Holding Co, which owns a 34 per cent stake in the airline, said that flynas has finalised the “deal with Airbus for the purchase of new aircraft”.

It gave no details of the number or type of planes that flynas will acquire but a source close to the negotiations told AFP they are from the A320 family of single-aisle aircraft.

Bloomberg News reported on Wednesday that a flynas order for A320 short- to medium-haul jets was imminent, and that the airline had been considering a deal for 60 planes with an option on 40 more.

The 10-year-old airline exclusively operates the A320, with a fleet of 29 as of last February, according to its website. It serves 33 domestic and international destinations in the Arabian Peninsula and immediate vicinity.

With new-found cash flow and profitability, flynas is ready to expand its fleet — currently all leased — to more than 100 planes over the next decade, CEO Paul Byrne told arabianbusiness.com in an interview last March.

He said flynas passenger numbers were expected to rise from 5.5 million in 2015, and that there was room for growth even as competition increased.

“Nobody knows how big the Saudi market is yet,” he was quoted as saying.

Two new entrants, Nesma and SaudiGulf, have launched domestic flights.

State-owned Saudi Arabian Airlines, known as Saudia, is the dominant player and aims to expand its own fleet to 200 aircraft by 2020.

Saudia flew more than 29 million passengers in 2015, and in June last year placed an $8-billion order with Airbus for 50 planes for domestic flights.

Qatar Airways seeks engine guarantees

Meanwhile, Qatar Airways is seeking strict guarantees as it talks to CFM International about supplying engines for a revamped order for Airbus narrow-body jets, which it expects to finalise “soon”, its chief executive said on Thursday. The Gulf airline has cancelled four A320neo jets powered by alternative Pratt & Whitney engines and expects to swap the overall aircraft order, which was originally for 50 jets, to larger A321neo aircraft.

CFM, a joint venture of General Electric and France’s Safran, is locked in a fierce battle with Pratt & Whitney to supply engines for new Airbus medium-haul jets.

CFM exclusively supplies engines for the competing Boeing 737 aircraft, which Qatar Airways has also ordered.

Chief Executive Akbar Al Bakr acknowledged Qatar Airways had received attractive prices when it originally ordered the new Pratt & Whitney engine, but said a decision on whether to keep those or switch to CFM for the upgraded A321neo order would depend on other guarantees.

“It is a factor, but what we decide will be based on what sort of guarantees we get on deliveries and at the same time performance,” he told Reuters in an interview.

— Reuters