Saudia Group Signs Industry-Leading Sales Agreement With Lilium to Acquire Up to 100 eVTOL Jets
Saudia Group and Lilium N.V. (NASDAQ: LILM) have signed a binding sales agreement for 50 Lilium Jets, with options for 50 more. This marks the largest eVTOL aircraft order by an airline in the MENA region. The agreement includes deposit schedules, delivery timelines, and performance guarantees. Saudia Group aims to deploy these jets by 2026, managed by Saudia Private, to enhance regional connectivity and support tourism, business travel, and pilgrimages. The Lilium Jet, with a capacity for six passengers, is expected to reduce regional travel times by up to 90%. This partnership aligns with Saudi Vision 2030 and Saudia Group's commitment to sustainable aviation. Lilium's order pipeline now includes 106 firm orders, 76 options, and about 600 aircraft under MOU.
- Largest reported firm order of eVTOL aircraft by an airline (50 jets with 50 options)
- Binding sales agreement includes deposits, delivery timelines, and performance guarantees
- Expected to reduce regional travel times by up to 90%
- Aligns with Saudi Vision 2030 and commitment to sustainable aviation
- Lilium's total order pipeline now includes 106 firm orders and 76 options
- First deliveries not expected until 2026, indicating a long wait for revenue realization
- Significant investment required for infrastructure and regulatory approvals
- Potential challenges in integrating new technology into existing airline operations
Insights
Saudia Group's significant acquisition of up to 100 Lilium eVTOL jets marks a pivotal moment in the aviation industry, particularly in the MENA (Middle East and North Africa) region. This order not only reflects a strong commitment to electric aviation but also signifies the airline's strategic alignment with Saudi Vision 2030. Investors should note the market implications of such a large-scale order, which indicates a growing confidence in the eVTOL market and its potential to transform regional air travel. The initiative's potential to improve connectivity and reduce travel times within Saudi Arabia could lead to an increase in market demand and passenger volumes for Saudia Group.
The partnership with Lilium, a pioneer in electric aircraft, could enhance Saudia Group's market position and brand value, attracting tech-savvy and environmentally conscious travelers. However, it's essential to consider the execution risks, such as potential delays in regulatory approvals, technological challenges in mass production and integration into existing infrastructure.
Long-term impact: The success of this venture could set a precedent for other airlines in adopting eVTOL technology, potentially leading to broader industry adoption. However, investors should remain cautious about the timeline and operational scalability.
The financial implications of Saudia Group's order of up to 100 Lilium eVTOL jets are noteworthy. A firm order of 50 jets with an option for 50 more is a substantial financial commitment, reflecting confidence in the commercial viability and future profitability of eVTOL technology. The agreement includes deposits and pre-delivery payments, which will impact Saudia's cash flows and capital expenditure in the short term. However, the potential for reduced operational costs due to electric propulsion and lower maintenance compared to traditional aircraft could improve long-term financial performance.
From an investor's perspective, this agreement could lead to increased revenue streams through faster, more efficient travel options and potentially higher profit margins due to cost savings. On the other hand, the financial performance of this venture will heavily depend on the successful integration of eVTOL jets into Saudia's operational fleet and the demand for this new mode of transportation.
Given Lilium's current advanced discussions with other global carriers, investors should monitor how these developments could affect Lilium's stock price and market position in the growing eVTOL sector.
The acquisition of Lilium's eVTOL jets by Saudia Group highlights the technological advancements in electric aviation. These jets offer unique vertical take-off and landing capabilities, allowing for greater flexibility in route planning and reducing dependence on traditional airport infrastructure. The Lilium Jet's ability to travel up to 175 kilometers at speeds of 250 kilometers per hour makes it a versatile solution for regional mobility, offering significant time savings compared to conventional transportation methods.
For investors, the technological promise of eVTOL aircraft can signify a shift towards more sustainable and efficient aviation. However, it's important to be aware of the technological hurdles that Lilium needs to overcome to ensure the reliability and safety of these jets. The certification process with the General Authority of Civil Aviation (GACA) and other regulatory bodies will be a critical factor in determining the timeline for commercial operations.
In the short term, the technological innovation represented by eVTOL jets can attract significant investor interest, albeit accompanied by risks related to technological execution and regulatory compliance.
- The firm order for 50 Lilium jets, with an option for 50 more, is the largest commitment in the eVTOL sector by an airline operator
- Saudia Group leads the aviation industry in the MENA region with the first agreement for the purchase of eVTOL jets
MUNICH, Germany, July 18, 2024 (GLOBE NEWSWIRE) -- Saudia Group and Lilium N.V. (NASDAQ: LILM), a leading electric aircraft manufacturer and pioneer in Regional Air Mobility (RAM), today signed a binding sales agreement for 50 Lilium Jets, with options for the purchase of 50 more. The signature ceremony was held at Lilium’s HQ in Gauting near Munich. The contract was signed by Fahd Al-Jarbou, CEO of Saudia Private, representing Saudia Group, and Lilium's CEO Klaus Roewe, in the presence of several distinguished guests including; Michael Kindsgrab, the German Ambassador to the Kingdom of Saudi Arabia; H.E. Engr. Ibrahim Al-Omar, Director General of Saudia Group; and Lilium Chairman Tom Enders.
This sales agreement, which follows the Memorandum of Understanding between Saudia Group and Lilium signed in October 2022, marks the largest of its kind in the MENA region and represents an important industry milestone as the largest reported firm order of eVTOL aircraft by an airline that plans to operate the aircraft. It signals a substantial commitment to electric aviation from a world-leading operator, as well as a clear preference towards the superior performance, economics, and passenger experience expected to be provided by the Lilium Jet.
The agreement includes a schedule of deposit and pre-delivery payments, timeline of future deliveries, guarantees on aircraft performance, and provisions on spare parts, maintenance, and repairs. In addition, the parties intend to sign a comprehensive “Lilium POWER-ON” agreement for aircraft fleet maintenance and support services.
H.E. Engr. Ibrahim Al-Omar, Director General of Saudia Group, commented at the signing event: “Saudia Group is proud to pioneer the MENA region as the first company to acquire all-electric eVTOL jets, which reflects our commitment to continuously reducing our carbon footprint and becoming an industry leader in regional electric aviation. We recognize the critical role that Lilium is positioned to play in enabling us to deliver a sustainable premium aviation experience and transport our guests even closer to their destination. This agreement amplifies our commitment to the Saudi Vision 2030 and is the result of a collaborative effort over the past years between Lilium and Saudia Group to explore how we can best bring eVTOL to the skies of Saudi Arabia. We are looking forward to the journey ahead.”
He added: “The eVTOL jets are revolutionizing guest transportation. Their unique vertical take-off and landing capabilities open up entirely new routes. Imagine traveling up to 175 kilometers at speeds of 250 kilometers per hour, saving valuable time compared to traditional options. This technology also tackles traffic congestion head-on. Business travelers and exhibition attendees will benefit tremendously from the ease and speed of electric aircraft, allowing them to seamlessly attend and participate in events. These innovative vehicles will also be a game-changer for tourism, sports, and entertainment, offering a premium travel experience for these exciting destinations."
Through this agreement, Saudia Group continues its ambitious objective to bring the world to the Kingdom by deploying its fleet of advanced eVTOL jets. This initiative enhances connectivity by providing seamless first and last leg connections into Saudia Group’s regional hubs and new point-to-point city connections, such as Jeddah to Makkah, expected to reduce regional travel times by up to
Saudia Group expects to receive the first jets in 2026, for which operations will be managed and run by Saudia Private, a subsidiary of Saudia Group. The Lilium Jet will feature large, premium cabins with capacity for up to six passengers plus luggage. It will deliver the Saudia premium experience that is deeply valued by the airline’s guests.
Prior to commercialization, Saudia Group will provide strategic support in Lilium’s certification process with the General Authority of Civil Aviation (GACA), Saudi Arabia’s aviation regulatory agency.
Klaus Roewe, CEO of Lilium, said: “We are proud of our partnership with a market leading airline such as Saudia. And we are thrilled to be pioneering progress in the eVTOL industry as the eVTOL manufacturer with the largest reported firm purchase order from an international airline that plans to operate the aircraft. The Middle East is a priority for Lilium, and Saudi Arabia will be a very large and exciting market for electric, high-speed regional air mobility. Our partnership will combine Saudia Group’s significant market knowledge with our unique eVTOL technology to transform premium class air travel in the GCC region.”
This purchase agreement with Saudia Group marks the latest addition to Lilium’s extensive order pipeline that now consists of 106 firm orders and reservations, 76 options, and roughly 600 aircraft under MOU. Lilium is in advanced discussions with additional global carriers that are looking to reduce carbon emissions and electrify regional air travel.
About Lilium
Lilium (NASDAQ: LILM) is creating a sustainable and accessible mode of high-speed, regional transportation for people and goods. Using the Lilium Jet, an all-electric vertical take-off and landing jet, designed to offer leading capacity, low noise, and high performance with zero operating emissions, Lilium is accelerating the decarbonization of air travel. Working with aerospace, technology, and infrastructure leaders, and with announced sales and indications of interest in Europe, the United States, China, Brazil, UK, and the Kingdom of Saudi Arabia, Lilium’s 1,000+ strong team includes approximately 500 aerospace engineers and a leadership team responsible for delivering some of the most successful aircraft in aviation history. Founded in 2015, Lilium’s headquarters and manufacturing facilities are outside Munich, Germany, with teams based across Europe and the U.S. To learn more, visit www.lilium.com.
About Saudia Group:
Saudia Group is one of the largest aviation conglomerates in the MENA region. The Group drives industry development with its 12 subsidiaries and strategic business units, and offers world-class air transport, cargo services, ground services, logistics, maintenance, catering, private aviation, real estate, training, and medical services.
Its most prominent subsidiary is Saudi Arabian Airlines “Saudia”, the national flag carrier of Saudi Arabia and a leading airline in the Middle East with a fleet of 144 aircraft and servicing more than 100 destinations to and from the Jeddah (JDH) and Riyadh (RUH) airports.
Saudia Group also caters to diverse passenger segments through entities like flyadeal for economy travelers, Saudia Private for elite travelers, and the Saudia Royal Fleet for the Saudi Arabia Royal Family. Saudia Technic, the Maintenance, Repair, and Overhaul (MRO) division, provides aircraft maintenance and manufacturing across continents, operating across the MENA region. Saudia Academy, the training arm of the group, is the largest aviation training academy in the MENA region.
Lilium contact information for Media:
Rainer Ohler
+491724890353
rainer.ohler.ext@lilium.com
press@lilium.com
Lilium Contact information for investors:
Rama Bondada
Vice President, Investor Relations
investors@lilium.com
Media Center Saudia Group:
Saudi Arabian Airlines Headquarters
Jeddah 21231, Kingdom of Saudi Arabia
Email: MediaCenter@saudia.com
Lilium Forward-Looking Statements:
This press release contains certain forward-looking statements within the meaning of the U.S. federal securities laws, including, but not limited to, statements regarding (i) Lilium N.V.’s and its subsidiaries (collectively, the “Lilium Group”) proposed business and business model, (ii) the markets and industry in which the Lilium Group operates or intends to operate, (iii) the expected features and specifications of the Lilium Jet, (iv) the anticipated timing of the commercialization and launch of the Lilium Group’s business in phases, including the Lilium Group’s progress toward type certification (and type certificate validation) of its Lilium Jet with EASA and the FAA, and (v) the Lilium Group’s agreement with Saudia Group for the purchase of 50 Lilium Jets, with an option for Saudia Group to purchase an additional 50 Lilium Jets, the timing of initial deliveries of Lilium Jets, the potential for pre-delivery payments and Lilium’s ability to access and utilize such, the proposed development and operation of an eVTOL network in the Kingdom of Saudi Arabia and the intended execution of an agreement for aircraft fleet maintenance and support services. These forward-looking statements generally are identified by the words “anticipate,” “believe,” “could,” “expect,” “estimate,” “future,” “intend,” “may,” “on track,” “plan,” “project,” “should,” “strategy,” “will,” “would” and similar expressions. Forward-looking statements are predictions, projections, and other statements about future events that are based on management’s current expectations with respect to future events and are based on assumptions and subject to risks and uncertainties that are subject to change at any time. Actual events or results may differ materially from those contained in the forward-looking statements. Factors that could cause actual future events to differ materially from the forward-looking statements in this press release include (but are not limited to) the risk that Lilium experiences delays in obtaining, or fails to obtain, type certification for the Lilium Jet in Europe, the United States, the Kingdom of Saudi Arabia and/or the other markets that it conducts or intends to conduct sales activities, as well as those risks and uncertainties discussed in Lilium N.V.’s filings with the U.S. Securities and Exchange Commission (the “SEC”), including in the section titled “Risk Factors” in Lilium N.V.’s Annual Report on Form 20-F for the year ended December 31, 2023, on file with the SEC, and similarly titled sections in Lilium’s other SEC filings, all of which are available at www.sec.gov. Forward-looking statements speak only as of the date they are made. You are cautioned not to put undue reliance on forward-looking statements, and the Lilium Group assumes no obligation to, and does not intend to, update, or revise these forward-looking statements, whether as a result of new information, future events or otherwise.
FAQ
How many Lilium Jets has Saudia Group ordered?
When will Saudia Group receive the first Lilium Jets?
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