Saudi Crown Prince Mohammed bin Salman recently announced plans of launching 2nd national airline as part of broader strategy to turn kingdom into global logistics hub in a bid to diversify from oil.

  • Creation of another flag carrier will put Saudi Arabia into 5th rank worldwide in terms of air transit traffic.
  • Detailed plan, of when and how airline will be created, is not yet out.

Backdrop

The Plan of creating new airlines was announced because; Prince Mohammad has been pushing for Saudi Arabia, which is the biggest Arab economy and largest country in Gulf geographically, to boost non-oil revenues to 45 billion riyals by 2030.

Boosting Non-oil revenues

The government of Saudi Arabia seeks to make the kingdom a global logistics hub. Plan includes the development of ports, rail and road networks. These networks would increase transport and logistics sector’s contribution about 10 per cent in gross domestic product which currently stands at 6 percent.

Purpose of creating new airline

The Comprehensive strategy of creating new airlines aims to position Saudi Arabia as global logistics hub by connecting three continents. New airline would increase number of international destinations from Saudi Arabia to more than 250. It will also double air cargo capacity to 4.5 million tonnes.

Need of second airline

Current flag bearer Saudi Arabian Airlines, Saudia, is one of the smallest airline networks in gulf region relative to its size. Saudia has struggled with losses for years. It has also been hit hard by covid-19.

Public Investment Fund

The sovereign wealth fund of Saudi Arabia. it has planned to build a new airport in Riyadh as a part of new airline launch. This fund is the main vehicle of boosting Saudi Arabian investments at home and abroad.

Saudi Arabia to launch a Second National Airline Saudi Arabia to launch a Second National Airline