Lilium agrees deal to supply electric vertical take-off and landing aircraft to Saudia

Lilium agrees deal to supply electric vertical take-off and landing aircraft to Saudia
The aircraft boasts an operating distance of up to 175 kms and can reach speeds of 300 kms per hour. Supplied
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Updated 18 July 2024
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Lilium agrees deal to supply electric vertical take-off and landing aircraft to Saudia

Lilium agrees deal to supply electric vertical take-off and landing aircraft to Saudia
  • Saudia will receive the first vehicle in 2026

MUNICH: German aerospace company Lilium NV is making its debut in Saudi Arabia with a groundbreaking deal to supply up to 100 electric vertical take-off and landing jets to Saudia, the Kingdom’s first national carrier.

The formalization of this agreement comes after a framework deal was initially arranged in late 2022, making Saudia the first airline in the region to invest in sustainable air mobility.

The Saudia Group and the German developer of fully electric vertical takeoff and landing aircraft have entered into an agreement to purchase 50 confirmed Lilium Jets, with an option for an additional 50 aircraft. 

Thursday’s signing ceremony took place at the German firm’s headquarters in Munich, attended by Arab News and key industry stakeholders.

CEO of Lilium, Klaus Roewe, underscored in his speech the significance of this partnership, stating: “It (the deal) signals a transformation and a readiness to shape the future.”

In an interview with Arab News on the sideline of the event, he described Saudia as a very important customer because it’s a “very high-ranking, high-class airline, a very demanding airline.”

Roewe added: “On the other side, it’s also representing a country which we believe is the perfect mirror of what Lilium wants to do, because Lilium is definitively the most advanced, the most innovative product.” 

The CEO went on to say that Saudi Arabia’s ambitions for its tourism and aviation sectors as outlined by the Vision 2030 economic diversification plan show a focus on sustainability and innovation.

“We believe it’s a perfect match between the Kingdom of Saudi Arabia and Lilium,” said Roewe.

Saudi Arabia will receive the first plane in 2026. 

The aircraft’s operations will be approved and conducted in accordance with the quality and safety standards of the General Authority of Civil Aviation, and it will be operated and managed through Saudia Private Aviation.

Ibrahim Al-Omar, the director general of Saudia Group, expressed his enthusiasm for the milestone, saying: “Our partnership with Lilium supports the ambitious goal of Vision 2030 by transforming the future of aviation in Saudi Arabia and beyond.”

He added that starting in 2026, the arrival of the first Lilium Jet will help transport 330 million travelers, providing faster and more efficient connections that exceed industry standards and expectations. This development is set to play a crucial role in key areas such as hygiene, entertainment, and business travel.

The director general said that the group is committed to leading aviation innovation with this collaboration with Lilium being “just the beginning.”

He added: “We will continue to explore new heights, offering the best to our guests and positively impacting regional and global aviation.” 

The German ambassador to Saudi Arabia, Michael Kindsgrab, highlighted in his address the transformative potential of this collaboration in advancing decarbonization and sustainability goals under the Kingdom’s Vision 2030. 

“One of the most important areas of this new cooperation is decarbonization and sustainability,” he said, adding: “This is truly a revolutionary concept, and we are very happy that Saudi Arabia, Saudia in this case, is at the forefront of launching this new technology.”

The ambassador said that this is a big event for Saudi Arabia and for Germany, with economic relations between two countries – with their shared focus on transformation, decarbonization and ecology – being some of the biggest common denominators in this relationship.

Roewe’s praised the collaboration between Lilium and Saudia, and said: “Our teams have been working together intensively after signing of the MoU in late 2022, and we received outstanding support and trust in the process for which we are enormously grateful and thank you for that.”

Saudia aims to integrate these electric vertical takeoff and landing aircraft into its fleet, revolutionizing domestic air transport with efficient, zero-emission solutions. 

The Lilium Jets, designed for regional high-speed travel with zero CO2 emissions, align with Saudi Arabia’s focus on sustainability and innovation under Vision 2030.

Lilium has the capacity to produce up to 80 aircraft per year. The aircraft features a 14-meter-long wing and an 80-meter-long body, with a maximum flight altitude of 3,000 meters. 

It boasts an operating distance of up to 175 kilometers and can reach speeds of 300 kms per hour. The airplane’s battery is recharged, not swapped, requiring 30-40 minutes to reach 80 percent capacity. 

The German ambassador to the Kingdom further elaborated on the economic implications of the deal, stating: “Today, we open another chapter for green mobility and green energy. This is truly a revolutionary concept, and we’re very pleased that Saudi Arabia, represented by Saudia, is at the forefront of launching this new technology.”

Saudia’s commitment to leading aviation innovation through its collaboration with the German firm sets the stage for continued exploration and advancement in sustainable aviation. 

The airline will play a pivotal role in shaping the future of air transport in the Middle East and beyond, reaffirming its position as a global leader in the aviation industry.

With this strategic initiative, Saudia and Lilium are poised to set new standards for sustainable aviation, driving forward the vision of a greener and more interconnected world through cutting-edge technology and collaborative partnerships.


Pakistan vows to introduce new incentives for foreign investors as it seeks external financing

Pakistan vows to introduce new incentives for foreign investors as it seeks external financing
Updated 29 August 2024
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Pakistan vows to introduce new incentives for foreign investors as it seeks external financing

Pakistan vows to introduce new incentives for foreign investors as it seeks external financing
  • Pakistan last month reached a bailout loan deal with the IMF which is pending approval from the lender’s executive board
  • Approval dependent on “confirmation of necessary financing assurances from Pakistan’s development and bilateral partners”

ISLAMABAD: Finance Minister Muhammad Aurangzeb said on Thursday the federal government was introducing new policy measures to streamline investment processes and provide incentives for foreign investors, Radio Pakistan reported. 

The government says it is committed to improving Pakistan’s investment climate as the South Asian country struggles to meet external financial needs to get approval for a $7 billion IMF bailout loan and fights a growing militancy problem.

Last month, Aurangzeb said Pakistan will focus on meeting its external financing needs by speaking with foreign governments and lenders to draw foreign investment as well as seeking loan rollovers. The government is also seeking to focus on more sustainable forms of external financing such as direct investment and climate financing.

Pakistan and the IMF reached an agreement for the 37-month loan program last month. The IMF has said the program is subject to approval from its executive board and obtaining “timely confirmation of necessary financing assurances from Pakistan’s development and bilateral partners.”

On Thursday, the finance minister chaired a review meeting with representatives from joint venture investment companies, including the Pak-Brunei Investment Company Limited and Saudi-Pak Industrial and Agricultural Investment Company in Islamabad.

“Aurangzeb expressed government’s unwavering commitment to creating an enabling environment for private sector investment, recognizing the critical role that joint venture companies like Pak-Brunei Investment Company Limited and Saudi-Pak Industrial and Agricultural Investment Company can play in driving economic growth,” Radio Pakistan said. “He underscored the importance of these ventures in attracting foreign direct investment.”

According to state media, the CEO of the Pak-Brunei Investment Company Limited gave an overview about the portfolio of the company and its major initiatives in Pakistan. 

“The role of Pak-Brunei Investment Company Limited in promoting economic cooperation between Pakistan and Brunei by facilitating investments in Industry and Agricultural sectors, through financial services, real estate, and SME’s support was highlighted,” the report said. 

The CEO of Saudi-Pak Industrial and Agricultural Investment Company also gave a presentation about the major development initiatives of the company for promoting Islamic finance, food security, digital finance, trade, and agriculture and livestock in Pakistan.

Various aspects of the operations of these companies, including investment strategies, performance metrics, and key impediments affecting their growth, were also discussed.

“Both companies presented their achievements and challenges, highlighting areas that require policy support to overcome obstacles in their operational landscape. The discussion also focused on potential areas for future investments and collaborations through more government-to-government initiatives in order to support priority sectors,” Radio Pakistan said. 

“The Finance Minister appreciated both companies and specifically applauded the implementation strategies of Saudi Arabia’s Vision 2030 for achieving their targets within a few years, and stressed that Pakistan is keen on learning those strategies.”

Aurangzeb has held a flurry of meetings with heads of foreign banks and companies in recent weeks in a push to bring in more investment. Last week he held meetings with top officials of Dubai Islamic Bank and Mashreq Bank to “discuss the economic outlook and explore investment opportunities in Pakistan.”

Pakistan is in talks with Saudi Arabia, the United Arab Emirates and China to meet gross financing needs under the IMF program, Aurangzeb said in July following a trip to China to seek energy sector debt reprofiling.

Rollovers or disbursements on loans from Pakistan’s long-time allies, in addition to financing from the IMF, have helped Pakistan meet its external financing needs in the past.

Tough conditionalities placed by the IMF, such as raising tax on agricultural incomes and lifting electricity prices, have prompted concerns about poor and middle class Pakistanis grappling with rising inflation and the prospect of higher taxes.

Bringing in foreign investors may become harder as Pakistan’s security situation deteriorates. On Sunday, separatist militants launched a series of coordinated attacks in the southwestern province of Balochistan, killing over 53 people, including at least 19 soldiers and police. Attacks across the country by religiously motivated groups like the Pakistan Taliban have also been on the rise in recent months.


Saudi Arabia, Poland set up business council to strengthen economic ties

Saudi Arabia, Poland set up business council to strengthen economic ties
Updated 29 August 2024
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Saudi Arabia, Poland set up business council to strengthen economic ties

Saudi Arabia, Poland set up business council to strengthen economic ties

JEDDAH: Saudi Arabia and Poland have established a joint business council for the 2024-2028 term to boost trade and investment between the two countries.

The Kingdom’s General Authority for Foreign Trade has finalized the formation of the Saudi-Polish Business Council, appointing Abdullah bin Mohammed Abu Dubeil as chairman and head of the executive committee. Fares bin Hazem Zaqzouq and Musab bin Ahmed Al-Mazeed will serve as vice chairmen, assisting Abu Dubeil in his roles, the Saudi Press Agency reported.

This move is part of Saudi Arabia’s broader strategy to deepen economic ties with Europe, with a particular focus on Poland, one of the continent’s largest economies. Poland has seen impressive growth in its agri-food sector, with exports reaching a record €47.9 billion ($51.1 billion) in 2023 — a €10 billion increase from the previous year.

In 2023, trade between Saudi Arabia and Poland amounted to around $9 billion. Saudi Arabia’s primary exports to Poland include mineral products and plastics, while Poland’s main exports to Saudi Arabia consist of tobacco, manufactured tobacco substitutes, machinery, and mechanical appliances.

The Saudi-Polish Business Council will enhance cooperation between businesses in both countries, aiming to expand trade and investment. GAFT oversees 46 bilateral and regional business councils, each designed to strengthen international economic partnerships.


Saudi Arabia’s Madinah region sees 8.6% jump in commercial registrations, reaching 61k in Q2

Saudi Arabia’s Madinah region sees 8.6% jump in commercial registrations, reaching 61k in Q2
Updated 29 August 2024
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Saudi Arabia’s Madinah region sees 8.6% jump in commercial registrations, reaching 61k in Q2

Saudi Arabia’s Madinah region sees 8.6% jump in commercial registrations, reaching 61k in Q2
  • Total number of economic activities in the region climbed to 105,132
  • Boost was largely driven by growth in the transportation and construction sectors

RIYADH: The Madinah region saw a significant rise in economic activity, with active commercial registrations reaching 61,833 by the end of the second quarter of 2024.

This boost was largely driven by growth in the transportation and construction sectors. According to a report from the Madinah Chamber of Commerce and Industry, the total number of economic activities in the region climbed to 105,132, reflecting an 8.6 percent increase from the same period the previous year.

Among the sectors, transportation and storage emerged as standout performers, experiencing a 19.1 percent growth. This sector includes land, sea, and air transport, along with logistics and warehousing services.

The construction sector also saw a robust increase of 18.8 percent, encompassing building, renovation, installation, and roadwork projects.

The mining sector, though smaller, demonstrated notable progress with a 12.7 percent growth rate. This growth aligns with the Kingdom’s broader strategy to diversify its economy through the development of its mineral resources. Service-related activities also saw a substantial rise, growing by 11.2 percent, while the food and accommodation sector experienced a 7.5 percent increase.

However, not all sectors shared in the prosperity. The financial sector faced a 14.7 percent decline, and the healthcare sector saw a decrease of 6.1 percent.

City of Madinah

In the city of Madinah, the financial sector experienced challenges, with a 15.3 percent drop in registered financial activities compared to the previous year. The healthcare sector also saw a downturn, with a 5.4 percent reduction in activities.

On a positive note, the contracting and transportation sectors both surged by 18.7 percent, and the mining sector grew by 13.1 percent. Madinah itself accounted for the largest share of active commercial registrations, totaling 55,903, which represented 90.41 percent of the region's total.

The economic report also provided insights into the geographic distribution of economic activities. Madinah city dominated, accounting for 92 percent of all registered activities, while other governorates such as AlUla, Al-Henakiyah, Al-Mahd, and Khyber contributed the remaining 8 percent. AlUla stood out with 3,388 registered activities by the end of the quarter.

Labor market trends

Labor market trends revealed that Madinah ranked fifth among Saudi Arabia’s regions in terms of total employment, with 443,487 individuals employed, representing 3.5 percent of the Kingdom’s workforce.

Notably, 84.5 percent of these jobs were in the private sector. By the end of the first quarter of 2024, 89,512 Saudi nationals were employed in the private sector, pushing the Saudization rate to 23.9 percent — a slight increase from previous quarters.

Real estate, consumer prices

The report also covered trends in the real estate and consumer markets. The Real Estate Price Index in Madinah showed a modest increase of 0.07 percent in the first quarter of 2024 compared to the last quarter of 2023, indicating a stable property market. Meanwhile, the Consumer Price Index rose by 1.48 percent in May compared to the same month in 2023, reflecting the impact of inflation on the cost of living.

Overall, the second quarter of 2024 marked a period of significant economic advancement for the Madinah region, with positive indicators suggesting continued prosperity in the coming months.


Saudi Aramco raises propane, butane prices for September

Saudi Aramco raises propane, butane prices for September
Updated 29 August 2024
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Saudi Aramco raises propane, butane prices for September

Saudi Aramco raises propane, butane prices for September
  • Official selling prices for propane rose by $15 per tonne from the previous month
  • Butane prices increased by $25 per tonne from August

RIYADH: The Saudi Arabian Oil Co., also known as Saudi Aramco, has raised the official selling prices for propane in September by $15 per tonne from the previous month, according to an official statement.

The company also increased butane prices by $25 per tonne from August. Aramco’s September OSP for propane is now $605 per tonne, while butane is priced at $595 per tonne.

Propane and butane are types of liquefied petroleum gas with different boiling points. LPG is commonly used as a fuel for vehicles, heating, and as a feedstock for various petrochemicals.

Aramco’s OSPs for LPG are used as a benchmark for contracts supplying the product from the Middle East to the Asia-Pacific region.

In winter, the demand for propane rises significantly due to its use in heating homes, which can lead to higher prices if supply struggles to keep up.

Such fluctuations are a normal part of the market and are expected during colder months. The increase in prices reflects the basic economic principle of supply and demand, with higher demand resulting in higher costs.


Saudi Aramco, Sumitomo Chemical waive $1bn debt for Petro Rabigh

Saudi Aramco, Sumitomo Chemical waive $1bn debt for Petro Rabigh
Updated 29 August 2024
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Saudi Aramco, Sumitomo Chemical waive $1bn debt for Petro Rabigh

Saudi Aramco, Sumitomo Chemical waive $1bn debt for Petro Rabigh
  • Aramco and Sumitomo Chemical have each agreed to waive $500 million in revolving shareholder loans and any associated commissions
  • Debt waiver is part of broader turnaround strategy to enhance Petro Rabigh’s profitability, balance sheet, and liquidity

RIYADH: Saudi oil giant Rabigh Refining and Petrochemical Co., known as Petro Rabigh, has had $1 billion in debt waived by its two largest shareholders as part of its refinery upgrade plans.

According to a statement on Tadawul, Saudi Arabia’s Aramco and Japan’s Sumitomo Chemical Co. have each agreed to waive $500 million in revolving shareholder loans and any associated commissions.

RSLs are loans from shareholders that can be drawn upon and repaid multiple times within a set period, typically used to support operations, finance projects, or address short-term cash flow needs.

This debt waiver is part of a broader turnaround strategy aimed at enhancing Petro Rabigh’s profitability, balance sheet, and liquidity.

The move aligns with Aramco’s plans to expand its downstream operations and Sumitomo Chemical’s transition from commodity to specialty chemicals.

Earlier in August, Aramco announced it would acquire an additional 22.5 percent stake in Petro Rabigh from Sumitomo Chemical for $702 million. This acquisition, priced at SR7 per share, is expected to make Aramco the majority shareholder with approximately 60 percent of the stake, reducing Sumitomo Chemical’s share to 15 percent.

The filing revealed that these agreements are related-party transactions, with Aramco and Sumitomo Chemical each owning 37.5 percent of Petro Rabigh. The debt waiver is anticipated to positively impact the company’s financial position, which will be detailed in a future announcement.

When the initial acquisition announcement was made, Sumitomo Chemical indicated it would reinvest the proceeds into Petro Rabigh, while Aramco pledged additional funding to match Sumitomo Chemical’s $702 million. The combined funding is set to reach $1.4 billion. Additionally, both companies agreed to phased loan waivers totaling $750 million each, resulting in a $1.5 billion reduction in Petro Rabigh’s liabilities.