It will be the second national carrier and be based in the capital city Riyadh, complementing Jeddah-headquartered Saudi Arabian Airlines (Saudia). The backbone of the newcomer’s fleet will be Boeing 787s. With its aviation double package, the government wants to strengthen tourism, become an international hub for transit travelers and businesspeople, and move into the top global league as a provider of air freight transportation. Boeing, and possibly Airbus, too, will benefit from the plans, since Riyadh Air wants to quickly build up its own fleet.
Supposedly, the neighboring airlines will be less amused: Etihad, Emirates, Qatar Airways, Kuwait Airways, and Turkish Airlines. Until now, they have profited greatly from travelers coming from Saudi Arabia or wanting to go to the country and preferring to use those carriers. The same applies to cargo shipments to and from Saudi Arabia. In the near future, these could land in the Saudi newcomer's cargo holds once operational, instead of those offered the market by EK, EY, QR or TK. The government has not disclosed how intercontinental traffic will be split between the two Saudi airlines. As the awarding of traffic rights is subject to strict rules, the future route portfolio of Riyadh Air is still unclear.
Wide ranging network
According to an official announcement, Riyadh Air will serve more than 100 destinations worldwide by 2030, benefitting from the country’s favorable geographical location half-way between Europe,
Africa, and Asia respectively. This all the more since layovers in the Gulf region have become common for passengers traveling between Europe and the Far East, as Russia’s war on Ukraine has
increased the duration of many flights on east-west sectors. Since FEB22, western airlines have to circumvent Russian territory due to sanctions imposed on the Kremlin by Brussels, Tokyo,
Washington, and others. This prolongs flying times by two hours or even more.
Catalyst
“Riyadh Air will serve as a catalyst for the Saudi National Transport and Logistics Strategy, and the National Tourism Strategy, by increasing air transport options, raising cargo capacity
and, in turn, growing international passenger traffic,” reads the official press statement sent out on the occasion of the announcement of the new Saudi airline.
The carrier will be headed by former Etihad boss, Tony Douglas, who was appointed as CEO. Representatives of the Saudi government indicated that the first widebody aircraft is expected to take to
the air in the spring of 2025. An official Boeing order was announced just hours ago (14MAR23). Reuters reports that State-owned Saudi Arabian Airlines (Saudia) and the new Riyadh Air will each
buy 39 widebody Boeing 787s to the value of USD 37 billion, making this the fifth largest commercial order in Boeing’s history. The deal contains options for 10 additional Dreamliners for Saudia
and 33 for Riyadh Air. Riyadh Air can expert delivery in 2025-2026, according to Boeing Chief Executive, Dave Calhoun. Whether Airbus will also gain a big slice of the cake, remains to be seen.
In October, Saudi Arabia was in advanced negotiations to order almost 40 A350 jetliners from Airbus.
Economic diversification
Newcomer Riyadh Air is wholly owned by Saudi Arabia's sovereign wealth fund, the Public Investment Fund (PIF), which has more than USD 600 billion in assets. It is forecast to add USD 20 billion
in “non-oil GDP growth,” and is one of the main drivers of the country’s efforts to diversify its economy and become less dependent on oil. No mention, however, is made as to whether Sustainable
Aviation Fuels will play a part in the new airline’s non-oil growth generation. Instead, this diversification includes plans to build a huge airport in Riyadh, named King Salman International.
According to the design, it will be capable to handle up to 120 million passengers by 2030 and process 3.5 million tons of air freight by 2050.
Yet, differences in cultural habits and norms may prove challenging to Riyadh Air as it seeks to siphon business away from its Middle East peers. It can be assumed that alcoholic beverages will
not be served to passengers while flying with the airline, in contrast to Turkish, Emirates, and others.
Whether masses of visitors will flock to the country in the future is also doubtful, to say the least, given the low level of rights for women and the highly regulated range of attractive leisure
and entertainment options.
Heiner Siegmund
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