Saudi Crown Prince Mohammed bin Salman announced the creation of a new national airline.
Riyadh Air’s Target Market
Industry veteran and CEO Tony Douglas will lead Riyadh Air’s vision to connect to over 100 destinations worldwide by 2030.
The new airline plans to leverage the Kingdom’s strategic location between Asia, Africa, and Europe to compete with established regional travel and cargo transport providers.
What’s in it for Saudi Arabia
Initial reports suggest Saudi Arabia expects the new airline to add $20 billion to its non-oil GDP. And create over 200,000 jobs.
The Competition Ahead
The announcement may lead to an arduous battle for passengers as the travel industry recovers from the pandemic. Riyadh Air will have to go toe-to-toe with regional giants Emirates, Qatar Airways, and Turkish Airlines.
Riyadh Air is owned entirely by Saudi Arabia’s Public Investment Fund and run by the Former CEO of Etihad Airways. Tony Douglas will run the airline and oversee Riyadh Air kickstarting its operations in 2025.
Riyadh Air’s target of servicing over 100 destinations and battling other Gulf aviation giants is expected to trigger a price war with the competition.
Some existing airlines vying for long-haul passengers making connections from the Middle East are Etihad Airways and Emirates Group in UAE, Bahrain’s Gulf Air, and Qatar Airways based in Doha.
Aviation Expert Says,
During a discussion with Arabian Gulf Business Insight, John Grant said,
“A new airline with 100-plus markets will be fighting for every possible connecting passenger from Europe to Southeast Asia, from China to Africa, and perhaps even to Australia over time.”
John Grant is a partner at the British consulting firm Midas Aviation.
The already established carriers have over 80 percent of their traffic connecting through their hubs, inevitably increasing the competition.
This launch of Riyadh Air will disrupt the market equilibrium and lead to increased competition with price wars across the Gulf.
Riyadh Air – Vision 2030
The new airline is another step by the Kingdom to establish itself as a transportation hub along with Oxagon and NEOM.
The Kingdom is driven to increase its tourism. It will play a significant role in Saudi Arabia’s transformation along with other strategic assets in work under Vision 2030.
It is a framework of aligned projects to diversify the Kingdom’s economy and reduce the country’s dependence on oil.
Riyadh Air and Tourism
The new airline will help cater to the growing need for travel to and from Saudi Arabia. With improved ease of doing business and the ever-rising quality-of-life rankings, Saudi Arabia will continue to attract tourists and businesses.
Read more about Saudi Tourism
The Fleet
In preparing their new fleet, Riyadh Air’s fleet of Airliners will consist of seventy-two 787-9 Dreamliner jets from the US manufacturer Boeing.
PIF owns Riyadh Air, Saudi Arabia’s sovereign wealth fund, the Public Investment Fund. PIF has over $600 billion in assets. It is the engine driving the Kingdom’s efforts to wean its economy off oil and diversify its GDP.
In October, Reuters reported Saudi Arabia was negotiating to buy 40 A350 jets from Airbus.
At the time, the head of state-owned Airline Saudia told Reuters that it was in talks with Airbus and Boeing on orders for itself and a planned new carrier.
