Saudi Arabia’s Crown Prince Mohammed bin Salman has formally announced the formation of Riyadh Air, a new national airline run by industry veteran Tony Douglas. According to the state news agency SPA, the kingdom’s location between Asia, Africa, and Europe will allow the airline to reach over 100 locations worldwide by 2030.
The new airline is expected to contribute considerably to Saudi Arabia’s non-oil GDP development, adding $20 billion and directly and indirectly creating more than 200,000 jobs.
This action is consistent with the kingdom’s aspirations to diversify its economy and minimise its reliance on oil. Riyadh Air is completely owned by the Public Investment Fund (PIF), Saudi Arabia’s sovereign wealth fund with over $600 billion in assets.
The declaration signals the country’s entry into the extremely competitive aviation business, where it will compete against established competitors such as Emirates, Qatar Airways, and Turkish Airlines. As the travel industry slowly recovers from the pandemic, the opening of Riyadh Air may result in a more difficult competition for travellers.
According to industry sources, Saudi Arabia is in advanced talks with Airbus to acquire around 40 A350 planes, with Boeing also seeking for a piece of the kingdom’s transportation growth. Saudia, the state-owned Saudi Arabian Airlines, had revealed that it was in contract negotiations with Boeing and Airbus for orders for both itself and a new carrier.
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