Riyadh Air, backed by Saudi Arabia’s sovereign wealth fund, is in talks to work with Hong Kong’s Cathay Pacific Airways to expand each other’s route network, after its multibillion-dollar order of 60 Airbus jets this week, said a senior executive.
The cooperation may “very possibly” include a code-sharing accord for the two carriers to fly passengers on each other’s aircraft to a wider network of destinations, Riyadh Air’s chief financial officer Adam Boukadida said in an interview with the Post on Wednesday. He emphasised that it was “too early” to specify details.
The aircraft order and the potential code-share with one of Asia’s biggest carriers are the latest steps by the year-old Riyadh Air to reach “100 different destinations, at the minimum, by 2030”, Boukadida said.
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A code-sharing accord is a commonly used partnership among global airlines. It can help Riyadh Air tap into Cathay Pacific’s network of over 80 global destinations to expand the Saudi carrier’s routes quickly, while giving Cathay Pacific access to more connections in the Middle East.
“Our focus is connecting the world to Riyadh, and Riyadh to the world”, so “we are always open [in] looking for the right partnership”, Boukadida said. “Cathay is a great airline. I have flown with them before.”
Shortly after its establishment last year, Riyadh Air has already made a number of cooperation agreements with several carriers: China Eastern Airlines, Delta Air Lines, Egyptair, Singapore Airlines, Virgin Atlantic and Cathay Pacific’s 30-per cent shareholder Air China. Three of its six accords are with Asia-based airlines, underscoring the importance of destinations in the region and passengers to its future.
“Asia is underserved significantly. Asia is key for us”, Boukadida said. “We have signed a strategic code share [accord] with Singapore Airlines, [but] we have the appetite for the right partner at the right time.”
Cathay Pacific, which resumed its thrice weekly direct service to Riyadh on Monday, sees a formal partnership with Saudi Arabia’s second carrier as a “win-win situation”, said chief customer and commercial officer Lavinia Lau.
“The Middle East is an important market as it has a very young population, half of [which] is below 30 years, with a strong demand for travelling,” Lau said in an interview with the Post.
To cater to Middle East travellers, Cathay Pacific has been serving halal-certified food in compliance with Islamic principles on all its routes to the region. It added several Arabic titles to its in-flight movie library in October: “El Bo’Bo’,” “Nabil Gamil Akhisaay Tagmil,” and “Four Daughters.”
Hong Kong’s flagship carrier is no stranger to the Middle East. It works with the kingdom’s flag carrier Saudia Airlines, and flies code-shared services to Bahrain, Dubai and Doha with Gulf Air and Qatar Airways.
Financial Secretary Paul Chan Mo-po led a delegation of more than 100 officials to fly Cathay Pacific’s Hong Kong-to-Riyadh direct flight on Monday, which was halted in 2017. The delegation included HSBC’s Hong Kong CEO Luanne Lim, HKEX CEO Bonnie Chan Yiting, and 25 start-ups led by Albert Wong, the CEO of the Hong Kong Science & Technology Park.
The resumption of Cathay Pacific’s direct service would “tighten” the relationship between Hong Kong and the kingdom, said Abdullah Alhagbani, the Saudi Tourism Authority’s chief partnership and executive affairs officer.
“Saudi Arabia is on target to become a top global tourist destination. The new direct flight will help to achieve that goal,” he said during the welcoming ceremony for the flight at the St. Regis Hotel in Riyadh on Tuesday.
Saudi Arabia has raised its tourism target to 150 million visitors by 2030, after beating its 100-million goal last year, seven years ahead of schedule, Alhagbani said.
Riyadh Air was established last year by the Public Investment Fund (PIF), the Saudi sovereign wealth vehicle, under the Vision 2030 goal to diversify the kingdom’s economy. The new airline is expected to boost tourism and create 200,000 jobs, Boukadida said.
Besides seeking partnerships, Riyadh Air is expanding its fleet. The purchase of 60 A321neo single-aisle aircraft adds to the 39 Boeing 787-9 it has on order and options for another 33. The A321neo can carry between 180 and 220 passengers in a typical two-class configuration, and was listed at US$129.5 million in 2018. Global airlines usually get steep discounts on catalogue prices in bulk orders.
The Airbus order was signed during the annual FII conference.
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