Saudi Arabia will launch another state-owned airline, entering a field already crowded with regional competitors, as Persian Gulf states turn to tourism in an effort to decrease their dependence on oil revenue.
The creation of Riyadh Air is forecast to add $20 billion in “non-oil GDP growth,” SPA said, adding that it was part of the state investment fund’s “strategy to unlock the capabilities of promising sectors that can help drive the diversification of the local economy.”Rico Merkert, a professor of transportation and supply chain management at the University of Sydney, said the move was a “a significant development for the aviation industry.
Henry Harteveldt, a travel industry analyst at Atmosphere Research Group, called the move “extraordinary.” He said the founding of Riyadh Air is probably an effort by the state fund to pressure Saudia to perform better.“They want the country to compete more for leisure travelers, and they certainly want the country to be an easier destination to reach for business travelers,” he said.
, particularly on women’s rights, has been widely criticized. The United States has blamed Saudi Crown Prince Mohammed bin Salman for ordering the killing of journalist and U.S. resident Jamal Khashoggi in 2018. Differences in cultural norms may also prove challenging for Riyadh Air as it seeks to compete with the big players in the gulf. Saudia doesn’t serve alcohol on its flights, Harteveldt said, noting that Emirates is known for a vast selection of wines.
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