Saudi Investment Group Lines Up Stake In Global Airlines

Kingdom Holding Company (KHC), a major Saudi Arabian investment group, is in negotiations to take a substantial equity stake in Global Airlines, the UK-based start-up Airbus A380 operator, sources familiar with the proposed deal tell Aviation Week.

The investment will enable Global to fund and accelerate its plans to acquire a fleet of four A380s. At present, the carrier, founded by former investment banker James Asquith, has a single A380, which formerly was operated by China Southern Airlines.

It is understood Global Airlines will modify its business model from concentrating on scheduled operations using its own brand to an aircraft, crew, maintenance and insurance (ACMI) model, making it the world’s first A380 ACMI operator.

The switch in strategy comes as demand for widebody aircraft on short- and medium-term ACMI contracts is boosted following the delivery delays of new aircraft from Airbus and Boeing.

The three aircraft Global wants to acquire have already been identified and talks are underway to bring them into the airline’s fleet.

Prince Alwaleed bin Talal of the ruling House of Saud founded Riyadh, Saudi Arabia-based KHC in 1995. It is listed on Tadāwul, the Saudi stock exchange. KHC has a large, diversified investment portfolio, including a substantial stake in Flynas, the Saudi Arabian low-cost airline, which recently launched an initial public offering.

Global, which currently has one A380 in its fleet operated by Portuguese wet-lease partner Hi Fly, conducted its first commercial flight on May 15 from Glasgow, Scotland, to John F. Kennedy International Airport (JFK) in New York. This was a proof-of-concept charter flight followed by another from Manchester, England, to JFK on May 21. The carrier is working with the UK Civil Aviation Authority to gain an air operator certificate.