National carrier Saudi Arabian Airlines (Saudia) has appointed HSBC as the lead arranger for a SR5 billion ($1.3 billion) sukuk issue, its Director General said on Monday.

The sukuk would be sold in the second half of the year, Saleh Al-Jasser told reporters.

Jasser said last month that the sukuk offering would finance fleet expansion, with the carrier aiming to operate 200 aircraft by 2020.

Saudi Arabian Airlines started out in 1945 with a single twin-engine DC-3 (Dakota) HZ-AAX given to King Abdul Aziz as a gift by the U.S. President Franklin D. Roosevelt. This was followed months later with the purchase of two more DC-3s, and these formed the nucleus of what in few years later was to become one of the world's largest airlines.

Today, Saudi Arabian Airlines has some one hundred and eighteen (119) aircrafts, including the latest and most advanced wide-bodied jets presently available: B787-9, B777-268L, B777-300ER, Airbus A320-200, Airbus A321, Airbus A330-300, and Embraer 170.

Saudia will continue to purchase state-of-the-art aircraft from major producers in the world to modernize its fleet, after conducting comprehensive studies on the airline’s requirements from different types and sizes of aircraft, in accordance with Saudia’s operation strategy for domestic, regional and international flights.