Saudi Arabia’s Crown Prince Mohammed bin Salman announced plans to build a second national airline as part of a broader strategy to turn the Kingdom into a global logistics hub as it seeks to diversify the kingdom’s economy away from oil.
A report stated that the formation of a new flag carrier will propel Saudi Arabia into fifth place internationally in terms of air transit traffic, without specifying when or how the airline would be established.
Prince Mohammad has been leading an effort to increase non-oil earnings to around $12 billion by 2030 in Saudi Arabia, the largest Arab economy and the largest kingdom in the Gulf geographically. The strategy also includes increasing air connectivity to 250 destinations and doubling air cargo capacity to 4.5 million tons.
According to sources, making the kingdom a global logistics hub, which involves the expansion of ports, rail, and road networks, would increase the transport and logistics sector’s contribution to GDP from 6% to 10%.
“This will help other sectors like tourism, Hajj and Umrah to achieve their national targets,” Prince Mohammed stated.
Saudi Arabian Airlines (Saudia) is the current flag bearer, and the country has one of the smallest airline networks in the region in terms of size. Saudi Arabia has struggled with losses for years, and the coronavirus pandemic has wreaked havoc in the country, as it has on its global rivals.
The Public Investment Fund (PIF), the kingdom’s sovereign wealth fund, announced earlier this year that it planned to build a new airport in Riyadh as part of the new airline’s launch focusing on tourism drive.