(Bloomberg) -- Saudi Arabia’s national carrier will buy 50 electric aircraft from German manufacturer Lilium NV, with an option to double the purchase as the oil-rich kingdom looks for advanced modes of travel to tourist attractions.
Saudia and Lilium signed the binding sales agreement on Thursday at an event in Gauting near Munich, where Lilium is based. The two sides already entered a looser memorandum of understanding in late 2022 for the electric vertical take-off and landing, or eVTOL, aircraft.
Saudia plans to deploy the craft across different locations. These include Jeddah, where it will carry passengers between the city to hotels in Mecca for religious tourism. Others will be in the capital and the Red Sea, where the jet will transport people between airports and projects being turned into tourism sites.
The purchase of the remaining aircraft depends on performance and support that Lilium will provide, Saudia said. Saudi Arabia plans to pour $800 billion into tourism over the next decade as it aims to host 150 million tourists a year.
Lilium said the deal is the largest reported firm order of eVTOL aircraft by an airline that plans to operate the plane. The $7 million Lilium jet, which comes in configurations of four to six passengers and one pilot, looks more like a small aircraft than a helicopter, boasting two sets of wings and ducted electrically-powered turbines.
Lilium plans to hand over the first jets to Saudia in 2026. The company is currently building the first full-scale units of test aircraft as it awaits certification. First piloted test flights will happen early next year, Lilium said on Wednesday, pushing back the original date from late this year because of delays with some components for the first aircraft.
The startup is considering building a factory in the Bordeaux region of France, where it will assemble its aircraft, Daniel Wiegand, Lilium’s co-founder said at the event. Lilium foresees annual demand for as many as 1,000 of its aircraft by 2035, he said.
Lilium is seeking €250 million in support from the French government for the new plant, Wiegand said.
--With assistance from Wilfried Eckl-Dorna.
(Updates with details of new plant in seventh paragraph.)
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