Saudi Arabia as part of its plan to turn Riyadh into a global aviation hub rivalling regional leaders like Dubai and Doha has announced the creation of a new national airline, on Sunday.
The new national airline, Riyadh Air is eyeing to launch flights to more than 100 destinations around the world by 2030, the official Saudi Press Agency (SPA) reported.
The Crown Prince Mohammed bin Salman’s wide-ranging “Vision 2030” reform agenda includes more than tripling the annual traffic to 330 million passengers by the end of the decade and move up to five million tonnes of cargo each year. Therefore, the Gulf Kingdom is pursuing this ambitious aviation goals
Plans for a new airport in the capital Riyadh were announced by official last year in November. The new airport spanning 57 square kilometres (22 square miles) is set to accommodate 120 million travellers per year by 2030 and 185 million travellers by 2050.
At present the airport can handle a capacity of around 35 million travellers.
The new airline is the latest in “a huge package of projects” that will “consolidate our country’s position as an international hub for aviation and a global logistics centre”, Saudi transport minister Saleh Al-Jasser said on Twitter.
Tony Douglas, former head of Abu Dhabi-based Etihad Airways, has been appointed CEO, SPA said.
A new hub
As per the announcement, Riyadh Air would operate a “fleet of advanced aircraft”, however the size or the source of fleet were not disclosed.
The Wall Street Journal reported on Saturday that the Public Investment Fund, the sovereign wealth fund that will own the airline, was “close to a deal” with Boeing for an aircraft order “valued at $35 billion”.
Currently, the Red Sea coastal city of Jeddah is the kingdom’s busiest international airport, where flag carrier Saudia is based.
Also Known as the “Gateway to Mecca”, the city welcomes millions of Muslims performing the hajj and umrah pilgrimages each year.
In recent years, officials has been pushing to position Riyadh, in central Saudi Arabia, as a rival to business hub Dubai.
“They want to make it a cosmopolitan city competing with the likes of Dubai and the likes of Doha from an investment perspective, from a tourism perspective, from an infrastructure perspective,” Khalil Lamrabet, former CEO of the Saudi Air Connectivity Program, told AFP last November.
“And to do that you need the country to develop a dedicated hub in Riyadh.”
Currenlty, the capital houses around eight million people, but officials have said they want the population to grow to 15-20 million by 2030.
Industry analysts who already describe the regional market as saturated are questioning whether Saudi Arabia’s goals are feasible or not.
Yet the Saudi strategy hinges partly on tapping the domestic market in a country with a population of around 35 million, which officials see as a major advantage for national carriers over rivals Emirates and Qatar Airways.
“There is sizable outbound traffic out of the kingdom as well as sizable domestic traffic,” Lamrabet said.
“The reliance on transfer (flights) will not be as high as the other hubs in the region.”