Airbus SE is set to source titanium from Saudi Arabia as part of a significant deal involving the kingdom’s national airline, Saudia. The European aircraft manufacturer has agreed to purchase 2.5 billion Riyals, equivalent to $666 million, worth of raw materials from Saudi Arabia. This deal also includes an order for up to 20 long-range aircraft from Saudia.

The agreement comes at a time when Airbus and Boeing Co. are facing challenges in securing raw materials, particularly titanium, due to sanctions related to Russia’s invasion of Ukraine. This situation has increased prices and complicated the supply chain for airplane manufacturers and airlines. Russia, which is a key supplier of titanium, is vital for producing this lightweight metal that is essential for various industries, including aerospace.

This new order includes 10 A330neo aircraft, with the option to purchase an additional 10. The deal is part of Saudi Arabia’s broader strategy to become an aviation and tourism hub while localizing manufacturing across multiple sectors, including aviation and automotive. The kingdom is investing billions in new aircraft for Saudia, a new airline named Riyadh Air, as well as developing new airports and luxury resorts.

The order reflects growing confidence in the Airbus A330neo model, which is gaining popularity due to its improved availability and economic efficiency as long-haul travel recovers from the pandemic’s impact.