Saudi tenders for new low-cost carrier in Dammam

• Airline will be third one announced this year
• Riyadh Air and Neom Airlines already in pipeline

Saudi Arabia has issued a public tender for another airline to operate in the kingdom.

Two new airlines have already been announced in the country this year – Riyadh Air and Neom Airlines.

And the General Authority of Civil Aviation is looking to introduce one more.

The tender invites investors “wishing to obtain a national low-cost air carrier licence at King Fahd International Airport in Dammam”.

• Emirates no longer ‘dastardly competitor’, says Tim Clark
• Saudi low-cost airline budgets for expansion
• Qatar Airways CEO plays down threat of competition

The kingdom hopes to boost the number of passengers through its 29 airports from 100 million to 330 million by the end of the decade, as part of Saudi Arabia’s Vision 2030 goal for tourism to generate 10 percent of GDP.

In 2017 Saudi Arabia launched the low-cost carrier Flyadeal, which is wholly owned buy the kingdom’s flagship operator Saudi Arabian Airlines (Saudia).

CEO Con Korfiatis said Flyadeal will add five new aircraft this year and is expected to take its fleet size of A320 aircraft up to 32 by the end of the year, serving 36 cities in total.

Korfiatis said there were huge opportunities in the low-cost market.

“If you look at the likes of the Easyjets, the Ryans (Ryanair), the South Wests you see in the States and Air Asia,” he said. 

“They’re still very immature in the Middle East and if you look at the penetration in the true low-cost area relative to the total market and you look at the percentages of Europe, North America and the Far East and even South Asia, we’re still a very small proportion of the total traffic.”

Last week Bloomberg reported that the kingdom’s Public Investment Fund is in talks to buy a stake in Flynas, a Riyadh-headquartered low-cost carrier.

Flynas had been planning a potential listing, the news report said, but the floatation could be delayed if the stake sale to PIF goes ahead. 

Riyadh Air, which is 100 percent owned by PIF, is expecting its first international flight to take off in early 2025 according to CEO Tony Douglas, who previously headed up Abu Dhabi’s Etihad Airways.

The carrier aims to connect Saudi Arabia to more than 100 destinations by 2030.

Neom Airlines will be a dedicated fleet serving the $500 billion Neom city in the north-west of the country, with the first flights scheduled to depart in the fourth quarter of 2024.

Speaking at Arabian Travel Market in Dubai this week, regional airline bosses welcomed the increased competition.

Qatar Airways CEO Akbar Al Baker said: “We will co-operate with them, we will support them, because we feel that relationships matter and there is a lot of business to go around for everybody.” 

Emirates president Sir Tim Clark was similarly upbeat, although he cautioned that investment in the infrastructure on the ground was also vital.

“If you’re spending that kind of money, if you want to bring that number of people in, you’ve got to bring your airports right up to speed and they have got to be seamless, wonderful pieces of best practice, fully automated, if you want to transit people through Riyadh to other parts of the world, or Jeddah or wherever else,” he said.

“Never in my wildest dreams did I think that Emirates would have it all its own way in perpetuity. It’s good that others see what we do, like what we do and want a piece of that.”