AlJazira Capital has initiated coverage on Saudi budget carrier Flynas Co., assigning an “Overweight” rating. The brokerage expects Flynas’s gross debt to rise to SAR 3.2 billion ($853.11 million) by 2029, up from SAR 425 million in 2024.

The increase in debt will happen as the airline enters a phase of high capital expenditure, scaling both narrow-body and wide-body fleets.

Capex is expected to rise from SAR 475 million in 2024 to a peak of SAR 2.7 billion in 2027, reflecting large aircraft acquisitions and pre-delivery payments.

The company is also strategically transitioning toward owning 15% of its fleet by 2030, compared to its previous fully leased model, the brokerage said.

Lease liabilities are expected to double from SAR 5.8 billion in 2024 to SAR 11.4 billion in 2029.

Flynas’ strong cash flow generation and negative working capital model provide support for liquidity and funding requirements throughout the investment cycle, the report stated.

The stock closed nearly 2% higher at SAR 76.25 on Thursday.

(Editing by Seban Scaria seban.scaria@lseg.com)