Saudi Arabian Airlines (Saudia) has signed an agreement with German air taxi developer Lilium to buy up to 100 of its aircraft for use on Saudia's domestic network, the state carrier's chief executive said on Wednesday.
Saudia CEO Ibrahim Koshy said the planes would be "a premium service" that carry four to six passengers, adding "it shows Saudia's commitment to sustainability because we're talking about 100% electric aircraft and we are the first airline in the MENA region that's introducing this as part of their network."
Certification by Saudi regulators is expected in 2025, he said.
Pricing has not yet been agreed because commercial terms have not been finalised, Koshy said.
Lilium, competing in a crowded market for electric Vertical Take-Off and Landing (eVTOL) vehicles, said last month it planned to set up capacity to build some 400 of its Lilium Jets a year, while tapping schemes that provide public research support.
The challenges of securing certification and funding innovations such as fresh battery technology have weighed on the new sector. Lilium shares have fallen almost 73% so far this year.
In an interview after the announcement, Koshy said "in the course of this year," Saudia will be looking at an operational commercial network.
"We'll also be looking at the infrastructure that's required," adding because the aircraft are eVTOLs, they do not require airports.
"It's more like a port with charging stations, passengers embarking, disembarking, and that's going to require a whole infrastructure."
Public and private investors would have an opportunity to build such infrastructure, Koshy said, speaking at Saudi Arabia's flagship investment conference FII.
Saudi Arabia aims to be carbon neutral by 2060. At FIIon Wednesday, oil giant Saudi Aramco launched a $1.5 billion fund to support the global energy transition, while Saudi officials said the switch from hydrocarbons could take decades, necessitating continued investment in conventional resources.
Koshy on Tuesday said Saudia is in talks with planemakers Airbus and Boeing on orders for itself and a new carrier the kingdom plans to launch, provisionally named RIA.