Saudi Arabia is planning to target international transit passenger traffic with its new national airline, going head-to-head with other regional carriers Dubai's Emirates and Qatar Airways and revving up regional competition, said a report.
The new airline would boost international routes and echo existing Gulf carriers by carrying people from one country to another via connections in the kingdom, known in the industry as sixth-freedom traffic, reported Reuters citing two people familiar with the matter.
Saudi Crown Prince Mohammed bin Salman announced earlier this month plans to launch a second national airline as part of a broader strategy to turn the kingdom into a global logistics hub as it seeks to diversify from oil.
The strategy marks a shift for Saudi Arabia whose other airlines, like state-owned Saudia and its low cost subsidiary flyadeal, mostly operate domestic services and point-to-point flights to and from the oil-rich country of 35 million people, it stated.
The creation of another flag carrier would catapult Saudi Arabia into the 5th rank globally in terms of air transit traffic, official state media SPA reported, without giving details on when and how the airline would be created.
Prince Mohammad has been spearheading a push for Saudi Arabia, the biggest Arab economy and the largest country in the Gulf geographically, to boost non-oil revenues to about SR45 billion ($12 billion) by 2030.
Making the kingdom a global logistics hub, which includes the development of ports, rail and road networks, would increase the transport and logistics sector's contribution to gross domestic product to 10% from 6%, the Saudi Press Agency (SPA) said.
With current flag bearer Saudi Arabian Airlines (Saudia), the kingdom has one of the smallest airline networks in the region relative to its size. Saudia has struggled with losses for years and like global peers, has been hit hard by the coronavirus pandemic.
“The comprehensive strategy aims to position Saudi Arabia as a global logistics hub connecting the three continents,” SPA quoted Prince Mohammed as saying.
“This will help other sectors like tourism, Hajj (pilgrimage) and Umrah to achieve their national targets,” he added.