Saudia and Riyadh Air sign deal to boost kingdom's aviation sector

Airlines sign codeshare partnership and set sights on future co-operation

Ibrahim Koshy, chief executive of Saudia, and Tony Douglas, chief executive of Riyadh Air, during a signing ceremony at the Dubai Airshow. Photo: Saudia

Saudia and Riyadh Air, the flag carriers of Saudi Arabia, have signed a preliminary agreement to support the kingdom's burgeoning aviation sector, with plans to collaborate further in the future.

The pact covers a comprehensive interline and codeshare agreement that will allow passengers to connect between sectors operated by either Saudia or Riyadh Air, the carriers said in a statement at the Dubai Airshow on Tuesday.

Members of each airline’s loyalty programme will now be able to earn points when travelling on codeshare flights. This will be followed by a "wider loyalty agreement", they said.

The strategic co-operation aims to optimise routes and resources, and also commits Saudia and Riyadh Air, as national carriers of the kingdom, to "working together and implementing broader synergies and efficiencies across the value chain in areas such as commercial, digital development, aviation support services and cargo/logistics", they said.

It is the "first major agreement between the two airlines and is set to lay the foundation for further co-operation in the future", the airlines added.

Saudia, formerly Saudi Arabian Airlines, has been in service since 1945, while the start-up Riyadh Air is set to start operations in 2025.

“This is a historic moment in which we join forces to serve guests travelling from and to the kingdom," said Ibrahim Koshy, chief executive of Saudia.

"Saudia and Riyadh Air will positively disrupt the industry as a whole and so we are proud to sign this [agreement] that signifies our partnership intent."

Saudi Arabia is seeking to attract more tourists and turn the country into a logistics hub as part of its Vision 2030 strategy to diversify from oil.

The Arab world's biggest economy has set a goal for the tourism sector to contribute 10 per cent to gross domestic product by 2030, up from 3 per cent in 2019.

To reach its goals, Saudi Arabia is investing billions of dollars to modernise its airports and buy new planes to improve its air transport connectivity.

The kingdom expects to attract about 100 million domestic and international visitors this year, with the tourism sector contributing almost 6 per cent to its GDP in 2023, Tourism Minister Ahmed Al Khateeb said this month.

In October, Saudi Arabia introduced reforms to help its aviation sector boost competitiveness, attract investors and increase transparency as part of a transformation plan that aims to attract $100 billion in private and public investment by 2030.

The new policies set out by the General Authority of Civil Aviation include expanding the qualifying rules for airport operators to help privatise more of kingdom’s airports, the regulator said in a statement on Monday.

Airports' performance will be overhauled, with quality targets linked to a new incentive scheme.

Saudi Arabia is currently home to Jeddah-based national airline Saudia and its low-cost subsidiary flyadeal.

The country also established Riyadh Air in March to fly more tourists into the kingdom.

The start-up airline is building up its fleet of planes to reach 100 destinations by 2030.

At the Dubai Airshow, chief executive Tony Douglas said the airline was set to place an order for narrow-body planes in the next few weeks.

The Saudia-Riyadh Air partnership "shows a solid statement of intent from both airlines", he said on Tuesday.

"Riyadh Air and Saudia will play a significant part in the growth of travel tourism within the kingdom and so having the national carriers working side-by-side is the best way to accelerate and manage this growth."