Saudi Arabia is now clearly demonstrating its ambition to be the emerging and dominant destination in the Gulf over the next few years. Major tourism infrastructure projects have been announced one after the other, and now it's the turn of air transport. Last October, the government announced that it was working on the launch of a new national airline. It's already starting to take shape.
On Sunday 12 March, Saudi Arabia's Crown Prince Mohammed bin Salman officially announced the creation of the new national airline, Riyadh Air. Based in the Kingdom's capital, Riyadh, the future airline aims to link Saudi Arabia to more than 100 destinations worldwide by 2030.
In particular, it should position Riyadh as the new hub between Europe, Africa and Asia. At the helm of Riyadh Air is Tony Douglas as Chief Executive Officer. This industry veteran was until last October CEO of Etihad in Abu Dhabi.
Billions for the Riyadh Air fleet
Riyadh Air will be 100 % owned by a public investment fund, the Public Investment Fund (PIF). This fund has more than $600 billion in assets and is the kingdom's financial arm for economic diversification. It is therefore the PIF, which will provide the investment needed to purchase 80 Boeing or Airbus aircraft. According to Wall Street JournalIt would appear that an initial agreement with Boeing is in the offing, worth $35 billion.
Saudi Arabia's ambitions could prove a real challenge for established Gulf airlines such as Emirates, Etihad and Qatar Airways. Riyadh Air will benefit from what the competition lacks so much: a genuine domestic market of 36 million inhabitants.
However, the question will soon arise as to what thefuture for the current national airline, Saudia. Merger or cohabitation? Nothing is less certain for Saudia. Riyadh Air expected to add $20 billion to Saudi Arabia's non-oil growth. And create more than 200,000 direct and indirect jobs.
