Riyadh Air positions Saudi as major player in Gulf aviation

Reuters/Riyadh Air

• New global carrier has big vision
• Target of 100 destinations in five years
• 39 Boeing 787s on order

Gulf airlines are bracing for an escalating challenge from Saudi Arabia’s new global carrier Riyadh Air, which is scheduled for take-off in 2025.

The highly hyped airline, whose launch was first revealed by the kingdom in March, is targeting 100 destinations in its first five years. 

This is a scale of ambition likely to reshape travel patterns across the GCC, as Riyadh Air enters existing markets or launches non-stop routes, bypassing neighbouring “super-connector” airports such as Dubai, experts say.  

Boosting its flight connections is vital to Saudi Arabia, which is pouring hundreds of billions of dollars into the creation of high-end tourism and business destinations, attractions and infrastructure, as part of its Vision 2030 economic plan.

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The kingdom’s ambition is to attract upwards of 100 million visitors a year by 2030. This would involve 330 million air journeys between 250 destinations and 29 Saudi airports, including a new Riyadh hub, in the same timeframe.

The national carrier Saudia is also expanding, with new jets and air taxis, additional routes and a fresh corporate livery.

It will refocus on domestic, international and pilgrimage traffic through Jeddah, while its low-cost carriers, Flyadeal and Flynas, will also expand significantly.

Another start-up, Neom Airlines, will serve its namesake sustainable city, which is being built in the kingdom’s northwest. 

Most attention, however, is on Riyadh Air.

‘Connecting to the world’

Riyadh Air’s chief executive, Tony Douglas, the former head of Abu Dhabi’s Etihad Airways, said: “We will connect the kingdom to the world, and the world to the kingdom.

“We’ve got the biggest population within the Arabian Peninsula, and the second-fastest growing economy in the world. But Riyadh, the capital, isn’t well enough connected.”

By 2030, Riyadh Air plans non-stop flights between its namesake city and more than 100 as-yet unspecified domestic and international destinations, among them major cities in Europe, Asia and North America from 2025, Douglas has said.

The airline has stated that it will offer three-class long-haul flights, with “redefined” business, premium economy, and economy cabins, but no first class. Without a legacy background, the airline says, it will be “digitally native.”

It has just one aircraft at present, a purple Boeing 787 Dreamliner, which for now is a promotional prop.  

But it has firm orders for 39 long-range B787s and options for 33 more, part of a double deal in which Saudia also booked 39 B787s and 10 options.

The airline is also expected to finalise a deal for up to 150 narrow-body Airbus or Boeing jets, potentially during the Dubai Air Show. 

Riyadh Air

Competitive product

Douglas insists his aim is not to compete with the Gulf’s largest carriers, Emirates, Qatar Airways or Etihad, for transit traffic via their respective hubs of Dubai, Doha and Abu Dhabi. At Abu Dhabi airport the Midfield Terminal is finally opening after a decade of construction. 

However, the industry fully expects Riyadh Air to present stiff competition for passengers, freight and skills.

Raffi Kasparian, managing director, Middle East, at Alton Aviation Consultancy says: “When the airline completes its initial ramp-up with about 40 widebodies, the expected route network, combined with a competitive product offering, is likely to lead to market recapture from other hubs in the Middle East. 

“It will also cater to additional demand resulting from further developments in Saudi.”

Kasparian says that Riyadh Air’s stated intention was to cater to point-to-point traffic focusing on inbound tourist and corporate travel and provide outbound services for Saudi residents.

In reality, he says, “transit traffic is likely to be established on select major Middle East flows, such as between the Indian subcontinent and the US or UK.”

Riyadh Air is also expected to lure Saudi traffic that currently flies via neighbouring hubs. 

“Any direct connectivity to Saudi Arabia would mean that passengers who previously would have transited through hubs like Dubai might now opt for direct flights, especially if they are competitively priced and timed – a critical factor,” says Linus Bauer, managing director of the Dubai firm Bauer Aviation Advisory.

“Established players will need to adapt, while newer entrants will look for opportunities to cement their place. The ripple effects will be felt internationally as airlines adjust their networks and strategies in response to these shifts.”

The aviation data group OAG ranks Dubai to Riyadh as the busiest route in the Middle East, and the world’s sixth busiest international route.

Saudia

Growth potential

Saudi’s aviation market has increased nearly 5 percent since 2019 in terms of passenger volumes, largely through Flyadeal and Flynas, according to OAG. Saudia’s market, though still growing, remains at 18 percent below pre-Covid levels. 

Saudi Arabia’s air traffic is 55 percent international and 45 percent domestic. Qatar (whose market is growing 5 percent) and the UAE (growing at 4 percent) are both wholly international. 

Although Saudi is unlikely to overtake those countries’ hubs, its growth potential is expected to shift market shares and close intermarket gaps.

OAG’s head of Asia, Mayur Patel, says that Saudi Arabia’s Air Connectivity Programme, its aviation growth strategy, “is setting the foundation to develop a world-class global network, with an ambition to become a mega-hub connecting east and west.

“In line with Saudi’s Vision 2030, there is a niche it can carve out for another full-service carrier in the Middle East to attract tourism from around the world. 

“This will come at the expense of other carriers’ growth as new markets and destinations are created, providing options for both business and leisure travellers.

“The foundations are being built to develop Riyadh Air as a major player in global aviation.”