Signing ceremony between Riyadh Air and Boeing.
After much anticipation, Saudi Arabia’s new airline Riyadh Air has been officially revealed with ambitions to make Riyadh a world gateway and global destination for tourism and trade—and help drive the diversification of the local economy. Flights will begin in 2025.
To show its commitment, the airline has struck a multi-billion dollar deal with Boeing for 72 Boeing 787-9 Dreamliners (39 confirmed and options for a further 33). The agreement is part of the fifth-largest commercial order by value in Boeing’s history.
Riyadh Air is a wholly owned company of Saudi Arabia's Public Investment Fund (PIF), and will be chaired by Yasir Al-Rumayyan, Governor of PIF, with aviation veteran Tony Douglas—former CEO of Etihad Airways—appointed as the new airline’s CEO.
Douglas said: “The new airline reflects the ambitious vision of Saudi Arabia to be at the core of shaping the future of global air travel and be a true disrupter in terms of the guest experience. By positioning the airline as both a global connector and a vehicle to drive tourist and business travel to Saudi Arabia, our new 787-9 airplanes will serve as a foundation for our worldwide operations.”
Operating from King Khalid International Airport (RUH) as its hub, Riyadh Air is aiming to connect the Saudi capital to over 100 destinations by 2030. They will be across the three continents of Asia, Africa, and Europe and the business will add $20 billion to non-oil GDP growth according to the PIF, though no timeline was offered.
The airline is expected to create more than 200,000 direct and indirect jobs “and will adopt world-class sustainability and safety practices” said PIF. Riyadh Air is designed to become a new national carrier and aligned with Saudi Arabia’s plans to build out its aviation ecosystem.
While a new airline is a big undertaking, the fact that the new entity is a PIF subsidiary will give it investment and financial expertise and capabilities. PIF’s other big investment in the sector is the recently announced King Salman International Airport masterplan.
The launch comes at a time when Riyadh Airports Company, the operator of RUH is seeing a strong post-Covid rebound in traffic. December 2022 international passenger numbers were more than 22% ahead of December 2019 while full-year international traffic had already reached 2019 levels (ahead by 0.5%).
The strong December for international ended a good quarter: October was 13% ahead, and November was 14% up on the same month three years ago, pushing Q4 ahead by 17% versus 2019. Across all passenger groups, December traffic was up 7% on pre-Covid December; while Q4 was 3% above 2019.
The arrival of Riyadh Air should stimulate RUH further. One of the reasons for the airport’s strong rebound was the creation of 28 new services to 22 countries, plus 10 new destinations launched in 2022. The new airline will bump up the route network.
RUH also saw high demand for consumer spending. Duty-free sales were 60% higher in Q4 2022 than in the same period in 2019, and 51% ahead for the full year versus 2019. Food and beverage sales were 18% up and other retail 8% up for Q4 last year against Q4 2019.
Riyadh Airports Company’s Commercial Group Vice President Abdulaziz Al Asaker, commented: “We are absolutely delighted with the very strong international passenger growth, and the growth trajectory we have seen. With our route network expansion plans into 2023, we anticipate continued strong growth.”