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Thursday, September 21, 2023

Saudi Arabia Ear Marks $30 Billion to Create New International Airline

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In order to launch a new international airline that would primarily compete with Emirates and other Persian Gulf carriers like Qatar Airways, Saudi Arabia is said to have amassed a “war chest” of more than $30 billion.

The rumor of the new airline dates back to June 2021, but during the past year, plans for the carrier have been developed behind closed doors, and sources cited by Arabian Business claim that a potential name has already been chosen.

The controversial architect of Saudi Arabia’s diversification into the tourism market and the nation’s wider liberalization, Crown Prince Mohamed Bin Salman, will make the final decision on the name of the new airline, which is expected to be called RIA and financed by the Public Investment Fund of Saudi Arabia.

Saudia, the country’s existing Jeddah-based international flag carrier, is expected to be “sidelined” and reorganized to concentrate entirely on moving Umrah pilgrims to and from Mecca.

Saudia will continue to be a “dry airline,” with designated prayer places on board, while RIA will try to imitate Emirates’ success by making alcohol widely available and creating onboard social areas that will appeal to tourists.

Riyadh, where RIA will be headquartered, will serve as the new entrance to the Kingdom’s tourism sector. Even a new international airport could be constructed specifically for RIA.

“We are talking about a brand-new airline that aims to do what Emirates did in a quarter of the timescale,” an anonymous source told Arabian Business.

“It’s unprecedented in the history of aviation. It’s also why they have yet to appoint a CEO – whoever takes this job will have to deliver the most ambitious targets you can imagine.”

There is no set date for when RIA would open, but Saudi Arabia is investing $100 billion to grow its travel and tourism sector, with the goal of having 30 million transit travelers pass through the nation by 2030.

Only about four million transit passengers are being handled annually by Saudia and low-cost airlines located in the Kingdom.

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