The project aligns with a bid to remake the once closed-off kingdom as a business and tourism magnet, but analysts said that even with official backing, its path to success is complicated. — Bloomberg
RIYADH: Undeterred by a crowded Gulf market, Saudi Arabia is going all in on an aggressive aviation expansion with a massive jet order and the launch of a new national carrier.
The project aligns with a bid to remake the once closed-off kingdom as a business and tourism magnet, but analysts said that even with official backing, its path to success is complicated.
This month, Crown Prince Mohammed Salman, Saudi Arabia’s de facto ruler, unveiled Riyadh Air, the new airline that is intended to transform the capital into “a gateway to the world”, according to state media.
Two days later, officials said Riyadh Air and Saudia, the kingdom’s existing flag carrier based in Jeddah, would purchase 78 Boeing 787 Dreamliner jets.
The deal, which the White House valued at “nearly US$37bil” (RM163bil) with options for up to 121 planes, constitutes the fifth largest by commercial value in Boeing’s history.
Riyadh Air’s chief executive, Tony Douglas, told AFP that the airline would serve the international, regional and domestic markets, putting it in direct competition with Gulf heavyweights Emirates and Qatar Airways.
That raises hard questions about how Riyadh Air will grab market share, especially at a time when long-haul non-stop flights that avoid the Middle East altogether are on the rise, said independent aviation analyst Alex Macheras.
“Replicating and then building on the successful business models of Gulf airline neighbours is going to be tricky in a crowded market where passengers are spoilt for choice,” Macheras said.
Saudia, also known as Saudi Arabian Airlines, was founded in 1945 and received its first jet as a gift from US President Franklin Roosevelt.
At the time, instead of Riyadh, foreigners mostly entered the kingdom via Jeddah on the Red Sea, which remains the “Gateway to Mecca” for millions of Muslims performing the hajj and umrah pilgrimages each year.
Foreign embassies did not relocate to Riyadh, in central Saudi Arabia, until the 1980s. — AFP
