Earlier in the week, Simple Flying reported on the revelation that the Gulf state of Saudi Arabia is planning to launch a second national airline. The kingdom’s present flag carrier is Saudia, which was formerly known as Saudi Arabian Airlines. Now that the dust has settled after a few days, let’s take a look at what little is presently known about the proposed airline.
Why does Saudi Arabia need a new airline?
Let’s start by establishing why the need for Saudi Arabia to have a new national airline has arisen. The reality is that it is a combination of factors. A key aspect is the struggles of Saudia, the kingdom’s existing flag carrier. While this national airline has a long and established history dating back to 1945, recent years haven’t been the best of times for Saudia.
Like countless airlines worldwide, the airline has faced difficulties at the hands of the ongoing coronavirus pandemic. However, its struggles date back before the health crisis, with ch-aviation.com observing that it has experienced losses for years. Furthermore, the carrier also has a small network for a Middle Eastern airline relative to its size.
Stay informed: Sign up for our daily and weekly aviation news digests.
Part of a wider development project
However, another key reason for the potential emergence of a new national airline is Saudi Arabia’s desire to move away from its economic dependence on oil. The proposed new carrier is part of a government project known as Vision 2030, which the kingdom states is “laying the foundations for our future.” Thus far, the airline is without a name.
One of Vision 2030’s core aims is to boost tourism to Saudi Arabia to reach 100 million visitors a year. According to AIN, the kingdom welcomed 16.5 million tourists in 2019, a 7.6 increase compared to 2018. These tourists injected $41 billion into the Saudi economy.
Evidently, the kingdom is a long way from reaching its goal of 100 million annual visitors. The effects of the ongoing coronavirus pandemic, in particular, will have stifled its previously promising growth. However, the proposed new airline will offer increased mobility, and will thus hopefully prove a catalyst for Saudi Arabia in driving visitor numbers upwards.
Who will the new airline compete with?
While the proposed new airline remains nameless, details are beginning to emerge regarding the sorts of markets in which it would compete. Speaking to AIN, Dawli Aerospace CEO Abdullah Aljawini confirmed that he is expecting big things, stating:
It is expected to be a five-star airline,. Saudi Arabia needs to be more competitive with its regional rivals. (…) The idea is an airline similar to Etihad Airways, Emirates, or Qatar Airways.
Based at a proposed new airport in Riyadh, the new carrier would be unlikely to threaten local low-cost carriers in the region. On this matter, Aljawini added that:
“Due to market segmentation, I don’t think the new airline will pose any direct competition to the operations of low-cost carriers, Flyadeal or Flynas, but it’s likely the Saudi airline sector will experience some form of strategic market consolidations or acquisitions in the near future.”
What do you make of the plans for Saudi Arabia to have a new national airline? Have you ever flown with its existing flag carrier, Saudia? Let us know your thoughts and experiences in the comments.