Saudi Arabia's Riyadh Air to Add More Competition to the Gulf Airline Market

On March 12, Saudi Arabia's Crown Prince Mohammed bin Salman announced the launch of a new national airline called Riyadh Air. The aim of Riyadh Air, along with Saudi Arabia's other national airline Saudia, is to help establish the country as an aviation hub.

Competition Sparks Action

Saudi Arabia is expanding in the Middle Eastern aviation market amid fierce competition from airlines in Qatar and the United Arab Emirates. Shortly after this announcement, Saudi Arabia signed a $37 billion deal with Boeing that would provide both airlines with 78 Boeing 787 Dreamliner jets. Furthermore, the country announced the construction of a new airport in Riyadh that is expected to accommodate 120 million travelers by 2030.

Riyadh Air and Saudia are not the only national airlines that the country plans to operate. In addition to both airlines, Saudi Arabia is expected to launch Neom Airlines by the end of next year. All three of these airlines are part of the country's Vision 2030 plan, which includes attracting 100 million visitors annually by 2030.
 

Growing Cities

The launch of new airlines to attract tourism has been successful for other Middle Eastern countries. Since launching Emirates in 1985, Dubai has transformed itself into the region's main hub for business and tourism. Dubai International Airport was ranked as the world's busiest airport for international travelers in 2021 when it received 29 million passengers. Qatar Airways has benefited in recent years from connecting flights and the 2022 FIFA World Cup. Finally, Etihad Airways and Turkish Airlines benefit from their hub airports being strategically located between continents.
 

Affordability?

One demographic that Riyadh Air is aiming to attract is passengers in Africa and Asia who travel internationally. The majority of them connect through Dubai, Doha, or Abu Dhabi when traveling to Europe. An advantage that Riyadh Air could have is that connecting flights are often more affordable than nonstop flights. The airline could offer prices that are lower than its Middle Eastern rivals to attract this audience. Since Saudi Arabia's economy is larger than Qatar's and that of the UAE, the country has the potential to succeed in a highly competitive market.