Flynas to test appetite for airline IPOs as Gulf rivals look on

May 14, 2025, 3:23 PM

Workers inspect a Flynas jet on the tarmac in Riyadh. The IPO could value Flynas at up to $3.7bn — Workers inspect a Flynas jet on the tarmac in Riyadh. The IPO could value the airline at up to $3.7bn

Saudi low-cost carrier to list on Tadawul
Etihad among airlines considering IPO
Solid returns for Jazeera and Air Arabia

Low-cost carrier Flynas is preparing to go public on the Saudi Exchange this month in a deal that is being watched not only by investors but also by Gulf rivals considering their own listings, analysts have told AGBI.

Among them is Abu Dhabi’s Etihad Airways, whose long-anticipated initial public offering could be shaped by Flynas’ performance on the Tadawul.

The Saudi airline’s listing is a rare test of investor appetite for aviation IPOs in the Gulf, where state-backed carriers are looking to tap public markets to fund expansion and reduce reliance on government funding.

It has been almost two decades since the last aviation IPO in the GCC. Only two of the region’s airlines have gone public so far: Kuwait’s Jazeera Airways in 2004 and Sharjah’s Air Arabia in 2007.

“If Flynas flies high, Etihad could follow with confidence and a bolder equity story,” says Wael Mahdi, CEO of Saudi-based consultancy Elevare360.

“Ultimately, this IPO is more than a capital raise – it’s a signal on how ready regional markets are to support the next chapter of Gulf aviation.”

Flynas, which is backed in part by billionaire Prince Alwaleed bin Talal’s Kingdom Holding Company, plans to sell 51.3 million shares for SAR76 to SAR80 – equivalent to a 30 percent stake. It secured approval from Saudi Arabia’s Capital Market Authority last month.

The IPO is expected to raise around $1.1 billion and value the company at up to $3.7 billion.

Books opened earlier this week and were fully covered within minutes, according to the terms of the deal seen by Bloomberg.

The offering will also test investors’ appetite for aviation equity as airlines return to profitability after the pandemic.

Etihad’s net income jumped almost ninefold to AED526 million ($143 million) in the three months to March 31. Last week Emirates Airline reported record pre-tax profit of $5.7 billion for 2024-25, making it the world’s most profitable airline.

Emirates Group – along with subsidiaries such as low-cost carrier Flydubai, airport services specialist dnata, Dubai Duty Free and Emirates SkyCargo – has long been seen as a candidate for an IPO.

At Arabian Travel Market last month, Emirates chairman Sheikh Ahmed bin Saeed Al Maktoum, remained coy on any IPO plans.

“If they [the Dubai government] say do it tomorrow, I have to do it,” he told reporters.

Turkish Airlines has also previously weighed IPO options for its cargo and regional divisions.

The two Gulf airlines that have listed have delivered solid returns for shareholders.

Air Arabia shares are up almost 14 percent in the year to date and recorded an all-time high in March. Jazeera’s stock has surged almost 50 percent since April 9, though it remains below its 2023 peak.

“These cases reinforce the idea that, despite the cyclical nature of aviation, disciplined carriers with strong exposure to local demand can outperform – especially in an era where Gulf tourism and domestic mobility are strategic priorities,” says Mahdi.

Flynas, which flies to 72 destinations in 30 countries, aims to expand its fleet from 64 aircraft to 104 by 2027 and 167 by 2030. It plans to capitalise on an increase in regional travel demand and Saudi Arabia’s push to attract 150 million tourists a year by the end of the decade.

“This is an opportune window for airline companies to list and raise funds,” says Nishit Lakhotia, director and head of research at Bahrain investment bank SICO. “Post-Covid travel demand has lifted profitability across the board.”

However, market watchers caution that the Flynas IPO will also be a barometer for future risk tolerance.

“Others will be watching carefully, but they will need to reflect on their own strategies and risk profiles before pursuing IPOs,” says John Grant, managing partner at consultancy Midas Aviation and an AGBI columnist.