New Saudi airline to go head-to-head with Emirates, Qatar Airways
New Saudi airline to go head-to-head with Emirates, Qatar AirwaysEuropost
Saudi Arabia plans to set a new national airline, which is to compete with Gulf giants Emirates and Qatar Airways over international transit passenger traffic, reported Reuters, citing two people familiar with the matter.
Crown Prince Mohammed bin Salman, who is pushing economic diversification to wean Saudi Arabia off oil revenues and create jobs, already announced earlier this week the transportation and logistics drive aimed at making the kingdom the fifth-biggest air transit hub.
Now the sources told Reutes that the new airline would boost international routes and echo existing Gulf carriers by carrying people from one country to another via connections in the kingdom, known in the industry as sixth-freedom traffic.
Such strategy marks a shift for Saudi Arabia whose other airlines, like state-owned Saudia and its low cost subsidiary flyadeal, mostly operate domestic services and point-to-point flights to and from the country of 35 million people. It also threatens to sharpen a battle for passengers at a time when travel has been hit by the coronavirus pandemic. Long-haul flights like those operated by Emirates and Qatar Airways are forecast to take the longest to recover.
But it is part of Prince Mohammed's efforts to lure foreign capital to create new industries including tourism, with ambitions to increase overall visitors to 100 million by 2030 from 40 million in 2019. Riyadh has already moved to compete with the UAE, the region's business, trade and tourism hub. The Saudi government has said that from 2024 it would stop giving contracts to firms that do not set up regional headquarters in the kingdom.
However, any airline requires substantial start-up capital and experts warn that if Saudi Arabia's ambition is to compete on transit flights it may have to contend with years of losses.