AIRSHOW-Saudi Aerospace says building Jeddah maintenance facility

Saudi Aerospace Engineering Industries (SAEI) is building SAR3.5bn aircraft maintenance, repair and overhaul facility in Jeddah.

(Adds details from interview, adds CEO quote)

By Katie Paul

DUBAI, Nov 9 (Reuters) - Saudi Aerospace Engineering Industries (SAEI) is building a 3.5 billion riyal ($933 million) aircraft maintenance, repair and overhaul facility in Jeddah in a venture led by Turkish airport builder and operator TAV .

SAEI Chief Executive Nader Khalawi said on Monday at the Dubai Airshow that the one million square metre (10.7 million square feet) facility would be the largest such installation in the Middle East.

The company plans to concentrate its civil aviation work at the new facility, which will also allow it to move it into military contracts for the first time.

"It's not a big secret that the military in Saudi Arabia is quite extensive, and we believe there is a big opportunity there," Khalawi told reporters.

The venture also includes Al Habtoor Leighton Group (HLG) and Al Rajhi Construction.

Scheduled for completion at the end of 2016, the project is made up of 11 aircraft hangars and 28 aircraft component shops at a cost of 2.87 billion riyals, plus an engine shop capable of handling the world's largest jet engines.

Construction is 60 percent complete, with the remaining work focused on installing equipment, said Khalawi.

SAEI, the technical arm of state-owned Saudi Arabian Airlines, has 5.3 billion riyals in service contracts with 25 to 30 airlines and plans to expand to 60 or 70 companies once the new facility comes online.

The company signed a memorandum of understanding with Lufthansa on Sunday and is expecting another with Air France on Tuesday, said Khalawi, without elaborating.

He also said a memorandum of understanding was signed with Boeing and Alsalam Aircraft Co., another branch of Saudi Arabian Airlines, to service 84 Apache helicopters, once the new facility is operational. ($1 = 3.7501 riyals)

(Editing by William Maclean and David Clarke) (( ; +97143664253; Reuters Messaging: Twitter: @WMacleanR))