Saudia Group offers China's Comac opportunity to set up jet assembly line in Jeddah

Aviation group Saudia Group has offered Shanghai-based plane maker Comac the opportunity to set up an assembly line in Jeddah, amid deepening Saudi-China ties and the kingdom's push to develop its nascent manufacturing industry.

The group's airline, Saudia, is also in talks with Comac to better understand the specifications and performance of its C919 narrow-body jet, Saudia spokesman Abdullah Alshahrani told The National on the sidelines of the Future Aviation Forum in Riyadh.

Earlier this week, Comac chairman He Dongfeng visited the headquarters of the Saudia Group in Jeddah and toured aviation services provider Saudia Technic's MRO Village, said Mr Alshahrani.

The maintenance, repair and overhaul complex, covering about one million square metres, is set to be completed in 2025 and expected to house the manufacturing operations of global aerospace companies.

“We presented to him the manufacturing opportunities on this large site … he showed interest in the potential opportunity for Comac to be present in the Middle East. These are all discussions and there are no decisions made,” Mr Alshahrani said.

Asked why Comac would consider opening a plant in a region where it does not currently sell its aircraft, he said the potential opportunity would help the plane maker to diversify its manufacturing base and to establish a presence in the Middle East's fast-growing aviation sector.

The talks come after visit by a high-level Saudi civil aviation delegation to Comac's headquarters in Shanghai in February, where its C919 and ARJ21 aircraft are assembled. Saudi Transport Minister Saleh Al Jasser visited Comac's production plant earlier.

Saudi Arabia, the world's biggest oil exporter, aims to grow its domestic manufacturing sector to diversify its economy away from hydrocarbons, create jobs for citizens, attract foreign investment and create a strong private sector.

It is linking up with international companies to build its manufacturing sector, share technical knowledge, develop local capabilities, train citizens and open production sites in the kingdom.

Exploring Comac jets

Saudia Group, owner of Saudia and budget airline flyadeal, placed an order for 105 Airbus narrow-body aircraft, its biggest on record, on Monday.

“Saudia is open to explore all types of planes and we're in discussions with Comac to know more about the C919,” Mr Alshahrani said.

“Are we interested in knowing the aircraft, the flight control, the specifications? Yes.

“We want to know more about its [performance] record because only a small number of planes are flying at the moment. This is not just with Comac, even with planes by other manufacturers, we would like to have a menu of aircraft options that we can consider.”

No decisions have been made and the talks are only at an exploratory stage, he said.

Comac is positioning the C919 as a viable alternative to the Airbus A320neo and Boeing's 737 Max as the two plane makers struggle to meet demand for new aircraft, and Boeing battles a series of crises.

The Chinese plane maker is a new entrant to the market dominated by Boeing and Airbus, and aims to take a slice of market share from the two industry leaders.

However, most of its orders are currently from Chinese airlines and plane lessors.

Asked about Saudia's initial impressions of Comac's planes, the airline executive said: “We see that there is a seriousness about producing a reliable aircraft and we see the manufacturer's interest in the region.”

A Saudia Group delegation will visit Comac's plant in Shanghai by the end of this year for meetings and a flight demonstration, Mr AlShahrani said.

“We will visit the facility and we will test their product,” he said.

Saudi-China ties

The aviation talks between the two companies come amid strengthening political and economic ties between Riyadh and Beijing.

“This is an extension of the expanded relations between Saudi Arabia and China. There's a trust in products and an opening up between the two markets,” said the Saudia spokesman.

The closer ties between the two countries “supports and accelerates” their economic partnerships and agreements.

If state-owned Comac decides to establish an assembly line in the kingdom, it would receive support from the Ministry of Investment as the move is in line with efforts to localise aircraft production, said Mr AlShahrani.

“All doors will be open to Comac to have a manufacturing presence in the kingdom,” he said.

Mr Dongfeng, Comac's chairman, wooed the Saudi Arabian market on Tuesday during an address to the Future Aviation Forum.

“Comac envisions enhancing global connectivity and diversity by contributing to Saudi Arabia's transportation development,” he said.

The plane maker can help Saudi Arabia boost its air connectivity in three ways, he said. First, its C919 narrow-body can serve the domestic market given the kingdom's vast territory, strong economy and the need to transport people and goods.

Second, it can connect Saudi Arabia with neighbouring markets that are home to a combined population of 500 million people and 180 airports across the Arabian peninsula, the Mena region and Turkey.

Third, Comac's coming C929 wide-body jet can help the kingdom establish itself as a global air transport hub.

“We hope that with the development of Comac, we can bring more dynamism and innovation to the industry and also more choices to our customers, and provide more opportunities to our suppliers,” he said.

Comac's sales pitch comes as the kingdom has set ambitious aviation and tourism targets for the next seven years.

It aims to transport 330 million passengers annually, increase its destinations to 250 and attract 150 million tourists – 70 million of those from overseas – by 2030.

Growing Chinese tourism

Beijing is a strategic partner for Riyadh and the aim is to increase the number of Chinese tourists to Saudi Arabia to between four million and five million by 2030, Gloria Guevara, chief special adviser to the Ministry of Tourism, told The National on the sidelines of the forum.

“China is a top priority market for us,” said Ms Guevara, who was previously the World Travel and Tourism Council's president and chief executive, as well as former tourism minister for Mexico, where she also oversaw the country's tourism board.

“I believe they care about culture, gastronomy and adventure and, in that case, we have all the offerings that appeal to them.”

To increase the number of inbound Chinese visitors, government pacts to ease visa issuance, establish greater air connectivity and increase the visibility of Saudi Arabia as a destination to Chinese travellers are necessary, she said.

Air China launched a new route between Beijing and Riyadh in May, becoming the third airline after China Southern and Eastern Airlines to connect the world's second-biggest economy with the kingdom, with more flights to be announced, she said.

Saudi Arabia also signed with top travel companies in China such as bookings portal Trip.com and others to “make sure that Saudi Arabia is on the shelves when the Chinese look forward to travel”, she said.

The ministry is also working to attract Chinese hotel groups to the kingdom and develop offerings that are suitable to Chinese guests.

Signs in Mandarin are available in the arrivals area of Riyadh airport and tour guides that speak Mandarin are also part of the push to attract Chinese visitors.

China was among the last markets to reopen to international travel after the Covid-19 pandemic, with its travellers starting to travel first domestically and then venturing abroad.

Chinese passenger traffic is “going to start growing significantly … we're doing all the work that we need to make sure that we're ready”, Ms Guevara said.

Last year, Saudi Arabia welcomed 104 million visitors, with 27.4 million from abroad and 77 million domestic travellers.

It revised its targets upwards, aiming for 150 million visitors by 2030, with a split of 70 million international and 80 million domestic.