The Kuwaiti firm will lease eight short-haul Airbus A320-200 planes, to be delivered in 2009 and 2010.

It is the second deal with the Saudi Arabian national carrier in recent months. Saudia now has 25 planes on order with Alafco, worth a total of $3.3bn.

In June, the airline agreed to buy eight Boeing 787-9 Dreamliner aircraft from Alafco. The company also agreed to lease a further four of the fuel-efficient long-haul aircraft, as well as five Airbus A320s, in a deal worth $2.7bn at list prices.

The leased 787s are scheduled for delivery from 2012, with those purchased by Saudia set to arrive between 2014 and 2015.