How Saudi Arabia eventually debuted Riyadh Air, its new airline
Saudi Arabia’s Crown Prince Mohammad bin Salman bin Abdulaziz, who also serves as the PIF’s chairman, and the Saudi Public Investment Fund (PIF) have announced that Riyadh Air will be the nation’s new airline.
Saudi Arabia’s other national airline, SAUDIA, has a hub at King Khalid International Airport in Riyadh, where Riyadh Air will be based (RUH). The PIF stated that the new airline will serve more than 100 locations worldwide by 2030, although it made no mention of its fleet. King Salman International Airport, which will replace RUH and make use of portions of the airport’s current terminals, will be built in the city in November 2022, according to a plan unveiled by the local government.
Riyadh Air: Airbus or Boeing?
The fund is attempting to secure a $35 billion contract with Boeing, the Wall Street Journal (WSJ), which quoted people familiar with the situation, reported.
The order would include a mixture of narrow-body and wide-body planes, with the PIF and Riyadh Air eyeing 100 aircraft or more. According to the WSJ story, Airbus and Boeing have been vying for a deal with the RUH-based carrier. It had previously been reported that the new Saudi Arabian airline was interested in purchasing up to 40 Airbus A350s. Yasir Al-Rumayyan, who is currently the PIF’s governor and will take over as the airline’s chairman, will serve as the CEO of Riyadh Air. Tony Douglas, a former chief executive officer (CEO) of Etihad Airways who served in that capacity from 2018 to 2022, will be present with Al-Rumayyan. The yet-to-be-announced airline’s CEO, Douglas, reportedly resigned in January 2023, according to the local media. Douglas would be in charge of the carrier, the PIF said on March 12, 2023.
The PIF states that Saudi and foreign CEOs will make up the remaining top management.
Taking advantage of Saudi Arabia’s location
While there are many Gulf-based airlines that connect passengers between Africa, Asia, and Europe, Saudi Arabia hopes to also take use of its proximity to these three continents to draw passengers to the new airline.
“The new national carrier will harness Saudi Arabia’s advantageous geographic location between the three continents of Asia, Africa, and Europe, enabling Riyadh to become a gateway to the globe and a worldwide destination for transit, trade, and tourism,” the PIF stated in its press release. The fund predicts that Riyadh Air will increase non-oil Gross Domestic Product (GDP) by up to $20 billion and bring about the creation of more than 200,000 direct and indirect jobs. The new airline will “advantage from PIF’s investing knowledge and financial capabilities while expanding on the company’s operations to become a premier national carrier,” the PIF added.
The creation of the airline is a critical step in the Saudi Arabian government’s Vision 2030 strategy, which calls on the nation to diversify its economy away from income from oil and other natural resources. Making the local aviation industry a global contender is one of the goals of the plan.
King Salman International Airport, which the PIF intends to construct on the same grounds as RUH, will be the new airport, which will also be in Riyadh. The new airport, which bin Salman unveiled in November 2022, will “improve Riyadh’s status as a global logistics hub, encourage transit, trade, and tourism, and operate as a bridge linking the East with the West,” according to its mission statement. The government estimates that the new airport will “add 27 billion Saudi riyals [$7.1 billion – ed. note] yearly to non-oil GDP and to create 103,000 direct and indirect jobs, in line with Vision 2030 objectives,” similar to how Riyadh Air did.
In order to “convert Riyadh to be among the top 10 city economies in the world and to support the increase of Riyadh’s population to 15-20 million people by 2030,” the government plans to use the airport. With six parallel runways and the ability to accommodate 120 million passengers by 2030 and 185 million by 2050, the airport is predicted to be one of the biggest in the world.
The airport serves “more than 28.5 million people a year,” according to a page on RUH’s website, which was last updated on February 17, 2022.
