A Saudi official has released more details of its plans to attract tourists, which certainly shows that the kingdom would become a much bigger air transit stop.
Peden Doma Bhutia
Saudi Arabia is aiming for a tenfold increase in the number of international airline passengers passing through the kingdom by the end of the decade as it plans to triple annual passenger traffic, an official has said.
Last year, the government announced plans to become a global transport and logistics hub by 2030 with traffic of 330 million passengers a year, although few details have emerged.
The strategy calls for investments of $133.32 billion and is part of an economic policy aimed at creating jobs and weaning the country off oil revenues.
The policy, which has seen the government order companies to move their regional headquarters to the kingdom, puts Saudi Arabia in competition with its neighbor the United Arab Emirates, where the Emirates airline’s main business model is transit traffic. .
Saudi Arabia’s main goal is to increase the number of arrivals to the kingdom, said Mohammed Alkhuraisi, head of strategy at the General Authority of Civil Aviation.
“We are not looking for the transit market,” he told Reuters.
The government wants direct international flights to increase from 99 to 250, in part to boost a nascent tourism sector but also to develop the kingdom into a major commercial centre.
A tenfold increase would mean that international transit traffic would increase from around 3 million in 2019 to 30 million in 2030, or 10% of annual passenger traffic in Saudi Arabia, up from 3% previously.
Emirates carried more than 56 million passengers in the year before the pandemic, while Qatar Airways, which also targets transit traffic, carried more than 32 million.
Unlike Saudi Arabia, a country of about 30 million people, there is no domestic aviation market in the United Arab Emirates or Qatar.
Some analysts say there is room in the Gulf to compete for transit traffic, particularly after Abu Dhabi’s Etihad Airways scaled back its ambitions in recent years.
Others are skeptical, partly because of the impact of the Covid-19 pandemic on the global travel industry, but also because of Etihad’s troubles despite wealthy state support.
Saudi Arabia also aims to increase annual air cargo volumes to 4.5 million by 2030 from 900,000 tonnes in 2019, half of which Alkhuraisi said will transit elsewhere.
Saudi Arabia sets up a new airline will be based in the capital Riyadh, while the 77-year-old state-owned airline Saudia will be based in Jeddah, a city on the Red Sea, as part of the transport strategy which includes the creation of the two hubs.
It is unclear when the new carrier, owned by the Public Investment Fund (PIF), will begin operations, although sources have said it will compete with carriers from the United Arab Emirates and Qatar.
Alkhuraisi referred questions about the airline to the PIF.
(Reporting by Alexander Cornwell; editing by Jason Neely)