Saudi Arabia’s Bizarre Plans For A New Riyadh-Based Airline

Saudi Arabia’s Bizarre Plans For A New Riyadh-Based Airline

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In its quest to become more of a tourist destination, Saudi Arabia is considering launching a new airline, and building a new airport in Riyadh. I have a lot of questions…

Saudi Arabia’s plans for a new Riyadh-based airline

At the direction of Crown Prince Mohammed Bin Salman, Saudi Arabia is hoping to boost its tourism industry, as the country looks to diversify from oil. Saudi Arabia is hoping to welcome 100 million visitors per year by 2030, which is a lofty goal. The country put this plan into action shortly before the pandemic started, as Saudi Arabia started issuing readily available tourist visas. Of course coronavirus has been a setback in that regard.

Bloomberg reports that the $430 billion Saudi Sovereign Wealth Fund is looking at investing in aviation, recognizing that robust international connectivity is one of the keys to promoting tourism. As part of the plan that’s under consideration, the country would build a new airport in Riyadh, and would also develop a new airline to be based there:

  • The new airline would be based in Riyadh, and would primarily serve both tourists and business travelers
  • The current flag carrier, Saudia, would be based in Jeddah, and would primarily focus on religious tourism
Riyadh’s current airport

For context on aviation in Saudi Arabia, in addition to full service flag carrier Saudia, the country currently has two other airlines, both low cost carriers:

  • There’s Flyadeal, which is owned by Saudia
  • There’s Flynas, which is owned by a Saudi prince
Flynas, one of Saudi Arabia’s other airlines

I’m not sure I follow the logic?

Before I share my thoughts, it’s important to acknowledge that Saudi Arabia still seems to be in the early stages of considering a new airline and airport, so it’s anyone’s guess if this ends up materializing. Furthermore, while I believe Bloomberg’s sources are accurate, there’s always a chance that some nuance is lost here.

Anyway, suffice to say that I’m confused. A new airport in Riyadh? Okay, sure. But why on earth would the Saudi government launch a second major global airline?

  • Saudia has been growing significantly, including modernizing its fleet
  • Saudia has done a good job serving both Jeddah and Riyadh, by often operating alternating frequencies to the two cities
  • While I think there are situations where it can make sense to split up airlines (like what Aeroflot is doing with Rossiya), I’m not sure I get the concept of making Saudia the airline for religious tourism, and creating a different airline for everyone else
  • If anything, I could see logic in Saudia becoming the airline for tourists and business travelers, and a new (lower cost) airline focusing on religious travel
  • Saudia seems way too big to exclusively serve religious tourists, especially given the uneven demand for that throughout the year

This is a real head-scratcher to me, so if anyone has a take on this, I’d sure love to hear it.

Saudia’s 777 first class cabin

Bottom line

In order to build its tourism industry, Saudi Arabia is allegedly considering launching a new airline based in Riyadh, and also building a new airport there. With this plan, national airline Saudia would primarily serve religious tourists, while the new airline would serve other tourists and business travelers.

I can’t really make sense of this strategy, but I’m curious to watch how it plays out. It’s one thing if Saudia were to become the airline serving tourists and business travelers, which I could kind of make sense of, but that’s not what’s happening.

What do you make of Saudi Arabia’s aviation plans?

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  1. geoff

    100,000,000 tourists/year not making the Hajj? Uh ok. Bad weather, no alcohol(to speak of), very few women's rights(still), very little to see/do besides eating(the food can be quite good actually).
    Sounds ambitious.

  2. Miski

    Maybe the new airline won't have a prayer space and will serve alcohol which might be attractive for non-muslim travelers. It's difficult to remove the prayer space from Saudia and serve alcohol all of a sudden. Makes sense from a social perspective to have Saudia focus on religious travelers and locals while the new airline market and cater to non-muslim travelers. I'm not sure if it's worth it financially though, especially with the fierce competition...

    Maybe the new airline won't have a prayer space and will serve alcohol which might be attractive for non-muslim travelers. It's difficult to remove the prayer space from Saudia and serve alcohol all of a sudden. Makes sense from a social perspective to have Saudia focus on religious travelers and locals while the new airline market and cater to non-muslim travelers. I'm not sure if it's worth it financially though, especially with the fierce competition from UAE and Qatar airlines.

    1. Levi

      Remember that Saudi Arabia is best described as a Beverly Hillbillies/Game of Thrones crossover event. Nothing has to make financial sense.

      That said, fierce competition with Qatar and Emirates (and sorta kinda Etihad) is the point, I suspect, as both are effectively extensions of their royal families.

  3. Luke

    I think the upcoming red sea resort will have a different set of autonomous like rules including permitting alcohol for non-muslim foreigners and perhaps will allow Israelis to stay within there too. Could be like a copy of Dubai.

  4. speedbird

    My guess regarding keeping Saudia for religious travel could be to keep the restricted inflight and airport experiences based on religious beliefs that already fits with the Saudia brand and start fresh with a new airline and new airport that fits with international standards. Separate the religious and tourist experience.

  5. Alpha Golf

    Just for perspective, Dubai had 16.7 million tourists in 2019 and Egypt had 13m. Jes sayin'.

  6. Terence

    Are they solving for the Saudi brand to capture more religious visitors, or to appeal to other segments of customers that would otherwise not fly Saudi or transit via Riyadh for various reasons?

  7. Alpha Golf

    Just for perspective, Dubai had 16.7 million tourists in 2019 and Egypt had 13m. Jes sayin’.

  8. Dylan

    My guess would be that Saudia would remain a dry airline and the new one would serve alcohol onboard and in lounges, and any other rules that wouldn’t apply to tourists.

  9. Jay

    Saudia is one of my favorite carriers; them being "dry" is a bonus! For those of you who can't go a minute without tipple, just wait for Neom to be finished...or, make friends at a compound for overpaid contractors.

    There's a lot to see in Saudi Arabia, and they're just getting started making it more accessible for everyone. Certain sites were considered haram to Saudis, but once the gov decided to initiate diversification of their...

    Saudia is one of my favorite carriers; them being "dry" is a bonus! For those of you who can't go a minute without tipple, just wait for Neom to be finished...or, make friends at a compound for overpaid contractors.

    There's a lot to see in Saudi Arabia, and they're just getting started making it more accessible for everyone. Certain sites were considered haram to Saudis, but once the gov decided to initiate diversification of their economy (e.g. in the form of new airports, tourist visas), places like Madain Saleh opened up.

    Jeddah is actually one of my favorite cities in the world (historic downtown, Red Sea jet skiing, diverse food options, multicultural atmosphere).

  10. Pierre

    100 million????

    That's hilarious!

    1. GLCTraveler

      Just like when the prior King said "Build a complete Metro system in Riyadh in 5 years ($25B USD)." No one has the balls to say "King, it physically can't be done." And to this day, after 8 years, it is still NOT done!!

  11. theflyingman

    My guess, this is being done to compete against the ME3 QR, EK, EY, The new Riyadh based carrier to serve alcohol and all the glitz and glamour of the ME3 without damaging the Flag carrier "Saudia's" more conservative brand image.
    If Saudia Arabia as a country really aims big tourism they might want to relook into alcohol laws. I really don't fancy a week long holiday by the beach and not being able...

    My guess, this is being done to compete against the ME3 QR, EK, EY, The new Riyadh based carrier to serve alcohol and all the glitz and glamour of the ME3 without damaging the Flag carrier "Saudia's" more conservative brand image.
    If Saudia Arabia as a country really aims big tourism they might want to relook into alcohol laws. I really don't fancy a week long holiday by the beach and not being able to have my Pornstar Martinis? Ok! this might not be the only reason to launch a new carrier, but I believe it is a very a strong one.

  12. henare

    Those numbers are crazy. They still have to do an awful lot to become attractive to a western traveler (sure, we all know Lucky will go because he seems to be into the middle east, big hotel stays, ...), and even after that happens I don't see 100,000,000 people turning up.

  13. MLS

    Saudi has significant tourism opportunity, it’s a country the size of Western Europe, with ecological diversity matching that of the US. There is no question 100mn is a lofty target, but 30-40% will be religious tourism.

    Concerning a new airline, makes logical sense. Saudia will maintain its position, serving religious tourism, this is natural as Saudi and Islam go hand in hand. The new airline will serve the eco, beach, event driven tourists ...noting...

    Saudi has significant tourism opportunity, it’s a country the size of Western Europe, with ecological diversity matching that of the US. There is no question 100mn is a lofty target, but 30-40% will be religious tourism.

    Concerning a new airline, makes logical sense. Saudia will maintain its position, serving religious tourism, this is natural as Saudi and Islam go hand in hand. The new airline will serve the eco, beach, event driven tourists ...noting the addition of alcohol.

    It remains lofty, but good goals are.

    1. GLCTraveler

      Any relation to MBS?? :-;

  14. Ahmed Radhy

    As someone who lived in Saudi for a while, I totally understand why they want Saudia to be only for religious travelers because Saudia is really bad. They want just to ignore that bad history of Saudia and start clean with a new airline :-)

  15. Franklin

    Not sure why religious travel would be 'uneven.' Yes, there is one major travel period, one minor travel period (a lot like thanksgiving and xmas), but religious travel is constant and year round.

    1. Luke

      For muslims, Hajj season which lasts just under 1 month out of the year would be a peak travel period by far compared to rest of year.

    2. Franklin

      Yes, that is what I refer to as the "one major travel period." There's another small uptick for Eid al-Adha (that's the minor travel period.) The Umrah pilgrimage, though, can be performed at any time of year, and people go to do Umrah in huge numbers. There is a steady stream of umrah pilgrims and visitors to Medinah.

      So my point is, of course there is a peak time, but tehre's also a solid...

      Yes, that is what I refer to as the "one major travel period." There's another small uptick for Eid al-Adha (that's the minor travel period.) The Umrah pilgrimage, though, can be performed at any time of year, and people go to do Umrah in huge numbers. There is a steady stream of umrah pilgrims and visitors to Medinah.

      So my point is, of course there is a peak time, but tehre's also a solid base of travelers at all times. To say travel is uneven just beucase there is one major peak seems uninformed.

  16. Mario

    The Saudi society is still very much an ultra conservative society. So Saudia is labeled “religious” to basically cater to those super conservatives who want what’s most important to them and that’s NO ALCOHOL. Eventually Saudia is likely to shrink and the new airline will be the primary Saudi airline.

    The new airline will likely be created to compete with Emirates and Qatar. It will likely be a full service airline which serves alcohol....

    The Saudi society is still very much an ultra conservative society. So Saudia is labeled “religious” to basically cater to those super conservatives who want what’s most important to them and that’s NO ALCOHOL. Eventually Saudia is likely to shrink and the new airline will be the primary Saudi airline.

    The new airline will likely be created to compete with Emirates and Qatar. It will likely be a full service airline which serves alcohol. This way those traditional ones will continue to use Saudia and tourists will use the new airline.

    This is what I think is their thinking! And it’s very likely that a western consultant is behind it.

  17. Mowogo

    The Saudi government see how successful the UAE airlines have been to the brand of UAE. Saudia being for religious travelers is because they know the policies they need to have to be a global carrier rivaling Ethiad is not what the current Saudia customer wants for their Hajj.

  18. UA

    100 million tourists a year, whilst discrimination against women and classing those without religious belief as terrorists?

    There's definitely some bizarre cognitive dissonance going on there.

  19. Jerry

    Riyadh must be the most boring place I've ever visited. The hotels are great, and I find Saudis to be incredibly friendly. The city is modern and nothing is too expensive, there's just one problem... There's NOTHING. TO. DO!!

    1. JB

      One of my uncles works for the Saudi Health Ministry in Mecca as an expat and whenever his family visits, his kids always complain about how there is literally nothing to do besides the religious sites.

  20. MFB123

    I’ve lived in KSA and the ONLY reason I could think of tourists going would be to SCUBA at the Red Sea. Yanbu and Jeddah come to mind as possible places that, with planning, could be set up in the long term to welcome tourists (Jeddah is surprisingly progressive by Saudi standards). But, the Government wants people to go to Riyadh? What the hell for? Also, try making a reservation from RUH to DXB on a Thursday- it’s tough because the locals are escaping.

    1. Ehch

      Not the locals escaping.... Dubai based consultants :)

    2. Franklin

      You need to get out of the house more, or check your attititude. Sure, Riyadh is boring, but SA is a vast, diverse, important country with tons of beautiful stuff. Come on now.

    3. Ehch

      Vast/diverse/important but woefully underdeveloped, unfortunately. Tourism infrastructure takes time, starting with decent hotels, reliable ground transport, trained service staff, etc... Try getting a decent 4/5 star hotel in the tourist "hot spots" Abha or Yanbu (heck, good luck even in Jeddah) and you'll have difficulty.

      That being said, billions are being invested so you can bet the place will become tourist-friendly in the years to come.

  21. Aziz

    This is unlikely to happen.
    The announcement was that it’s being considered and that it any or may not happen.
    If it does happen, it’ll be a fresh start for a country trying to cut its ties with an ultra conservative clergy, Saudia can remain the conservative airline it’s always been.
    There’s a need for international travel that isn’t rooted in conservatism, and that’s not even aimed at tourists but rather at...

    This is unlikely to happen.
    The announcement was that it’s being considered and that it any or may not happen.
    If it does happen, it’ll be a fresh start for a country trying to cut its ties with an ultra conservative clergy, Saudia can remain the conservative airline it’s always been.
    There’s a need for international travel that isn’t rooted in conservatism, and that’s not even aimed at tourists but rather at the more affluent, liberal Saudis who’ve been choosing foreign airlines over Saudia.

  22. Airlineguy

    Come on. Are you stupid? Saudia would
    handle business traffic obviously.

  23. UpperDeckJohnny

    Perhaps they will relent and serve alcohol, and perhaps make Riyadh bar tolerant.

    Before someone else says it:

    Yes, occasionally, very occasionally pigs do fly!

  24. Jim

    I wouldn’t go to Saudi if it was free.

  25. Malc

    There's no doubt that the KSA has long been boring, but it has significant natural beauty. Is that likely to draw a hundred million tourists? No, but the word is getting out. Moreover, people who are scratching their heads about Riyadh are ignoring the Qiddiya project. It's immense, and long term probably will pull quite a few tourists. As others have pointed out, the religious tourists combined with the secular ones will represent a significant...

    There's no doubt that the KSA has long been boring, but it has significant natural beauty. Is that likely to draw a hundred million tourists? No, but the word is getting out. Moreover, people who are scratching their heads about Riyadh are ignoring the Qiddiya project. It's immense, and long term probably will pull quite a few tourists. As others have pointed out, the religious tourists combined with the secular ones will represent a significant number, even if they fall shall of their goal.

    I agree that the new airline would most likely allow alcohol. I think it sounds quite smart to have one airline to serve religious tourists and another for secular ones. I also agree that the Red Sea tourism area will most likely get some kind of dispensation to serve alcohol, so after some fun at Qiddiya, tourists will head for world-class beaches and diving/snorkelling. What I do wonder about is how effectively it will all be pulled off. The country is littered with unfinished buildings and projects; good management has always been a problem.

  26. Dom Yeo

    Firstly, I think this was the intention for greenlighting SaudiGulf Airlines, which for some reason isn't resonating with locals, or I suspect, the Saudi government just didn't want the control of an airline based in the country's capital to be masterminded by foreign interests in Bahrain.

    Secondly, they seem to be taking a page of the UAE, wanting Saudia (Emirates) to focus on hubbing Jeddah - Madinah area, while having their version of Etihad based...

    Firstly, I think this was the intention for greenlighting SaudiGulf Airlines, which for some reason isn't resonating with locals, or I suspect, the Saudi government just didn't want the control of an airline based in the country's capital to be masterminded by foreign interests in Bahrain.

    Secondly, they seem to be taking a page of the UAE, wanting Saudia (Emirates) to focus on hubbing Jeddah - Madinah area, while having their version of Etihad based in the capital. Don't forget, Saudia has become the new ME3 in the new scheme of things. Saudia, EgyptAir and Turkish Airlines are the current reigning ME3s.

  27. Sierra Lima

    Riyadh airport is far from being saturated. Having that in mind, they may add a new terminal to the existing one which would be much cheaper.

  28. Paul

    I agree with others that the new airline will serve alcohol. I’ve previously thought this doable by not serving alcohol over Saudi Airspace.

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Dylan

My guess would be that Saudia would remain a dry airline and the new one would serve alcohol onboard and in lounges, and any other rules that wouldn’t apply to tourists.

Alpha Golf

Just for perspective, Dubai had 16.7 million tourists in 2019 and Egypt had 13m. Jes sayin'.

Miski

Maybe the new airline won't have a prayer space and will serve alcohol which might be attractive for non-muslim travelers. It's difficult to remove the prayer space from Saudia and serve alcohol all of a sudden. Makes sense from a social perspective to have Saudia focus on religious travelers and locals while the new airline market and cater to non-muslim travelers. I'm not sure if it's worth it financially though, especially with the fierce competition from UAE and Qatar airlines.

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