Saudi Arabia is starting a new mega-airline meant to counter Emirates and Qatar. They already have Saudia, based in Jeddah, and they aren’t expanding it. Instead they’re starting from scratch with a $30 billion warchest to launch “RIA” based in Riyadh. They’re hiring away the CEO of Etihad, and they’re about to place a major order for new planes.
- They’re in “advanced talks” to purchase 40 Airbus A350s
- In total RIA is looking to acquire 75 planes. Boeing 787s aren’t out of the mix, but current tensions involving Russia and oil prices complicate matters. They’re also looking at narrowbody aircraft.
Riyadh Airport
This new airline is meant to connect transit passengers from around the world to South Asia and Africa. That’s low yield business, and doesn’t do much for the Saudi economy, since passengers don’t even enter the country. Generally transit passengers help fill excess seats, supporting flights for local traffic. Here those passengers seem to be the goal, growing the country’s connecting traffic more than seven-fold.
Wanting to put the country ‘on the map’ and open up to the world, shift away from a reliance solely on oil and build into other industries, and looking at models like what Emirates has helped to do for Dubai makes a certain amount of sense.
However it’s a money sinkhole – just ask Etihad. But even lighting $30 billion on fire, they aren’t going to get themselves very much. Growing the airline remains faced with the challenges of even securing a Saudi visa for many (easier than it used to be, but an involved process and costly, and in most ways more cumbersome than the U.A.E.). Some specialized forms of travel, of course, may benefit:
At the end of the day Emirates already exists. Qatar can try to match, and lose money in the process. Saudi Arabia bankrolling another Gulf competitor means competing on service or price, and losing money either way, but without other changes inside the country it’s a path that doesn’t even have upside. If they succeed and shuttling traffic through Riyadh they’re only marginally better off at best.
What is the breakdown of transit passengers vs local for Emirates, Etihad, and Qatar?
The Riyadh crowd traditionally dislikes the “liberal” Jeddah crowd. Have to wonder how much of the tribalism within Saudi Arabia is a part of this move that will cost Saudia and JED customers.
Saudi Arabia’s de facto leader — scummy Saudi Crown Prince MBS — has big dreams and an obsession to out do his Emirati allies. The one thing he doesn’t get is that Saudi Arabia is traditionally more widely xenophobic and inward-oriented than the Emiratis and that has consequences for his grandiose desires.
Saudi Arabia does plan on RUH being able to handle lots more TWOV/visa-waived-transit visitors to stop and visit the country. It appears to me that they want the visitors and interactions to be RUH-focused rather than JED-focused. I doubt that this push by the Saudi crown prince has much of anything to do with opening Saudi hearts and minds toward others inside or outside of Saudi Arabia.
Keep in mind the Saudis will even use foreign social media postings to try to punish people during visits to Saudi Arabia. And unlike with the Emiratis, the Saudis are less likely to make public concessions and cut foreigners from “favored” countries a break as easily.
The woke left can’t be true to themselves if they patronize middle east airlines where the sponsor countries throw gays off buildings while getting rich on…gasp, FOSSIL FUELS!
You have to wonder how much impact Biden’s statements that there will be “consequences” for the Saudis for their decision to cut oil production just before the U.S. midterms.
Boeing has enough challenges on their hand without losing a major order because a major client is ticked.
Will it be a dry airline, like Saudia? If so I don’t see how they’ll manage to snag any of the luxury travel market — the in-flight F&B service is a shining star of the ME3.
And the conservative right cannot be happy flying an airline sponsored by countries that treat women as second class citizens, butcher journalists and literally stone people to death for heresy. Oh, wait- I guess they will feel right at home…
They do not allow alcohol on any flight to or from Saudi Arabia. Who wants to fork over premium dollars when the drink choices are tea, coffee or juice?
@Tim Dunn – “Consequences” are to stop selling arms or providing training to Saudi military. Biden would be more than happy for Boeing to get a fat order right before the midterms, though it looks like the Saudis will buy Airbus.
I am unclear about the UAE visa reference as upon landing you get it for 30 days if a citizen of the US, Canada, Australia, NZ or the EU. A few years ago I certainly had no trouble coming in from Chicago to Dubai. (And thoroughly enjoyed getting out of there and seeing the other 6 emirates where things were more “normal”. No obvious borders existed for any of them.) Anyway, that will be quite a hit if Boeing doesn’t get any orders.
I will never set foot in the Hell Hole known as Saudi Arabia. However, it will be nice to see 30 billion go up in flames.
My sense is this is meant to the sync-up with the build-out of “The Line” which seems fascinating and also unlikely. Let’s assume for a moment “The Line” is successful than I could see this kind of mega-scale plane expansion and “hub” in Saudia Arabia.
https://www.youtube.com/watch?v=0kz5vEqdaSc More on “The Line” for the uninitiated. Allegedly the construction has just broken ground based on some recent drone footage
Saudi Arabia is in process of liberalizing its alcohol rules, so I wouldn’t be surprised if they do come around to conditionally serving alcohol on at least. some of their flights.
I’ve never met so few people spending so much money so fast on alcohol as I have in Europe and the US when seeing the alcohol-loving partying Gulfies around.
And this isn’t really new. For decades a lot of the gulf royal family members who had medical visits in the US would have cirrhosis. Their livers had taken a beating from bad drinking habits.
rjb,
You should know your lord Trump loves the Saudis and Emiratis.
The Saudis, Emiratis and Qataris don’t throw gays off the building in their own jurisdiction. There are homosexual and bisexual members of the royal families in their countries, and they too have managed to avoid getting thrown off the buildings. The people going off the buildings in these gulf countries are more typically building workers imported from poorer parts of Asia.
May want to confirm on what CEO they are hiring. I believe I read it’s the CEO from Etihad, not Emirates.
@swag
emirates is about 70 pct transit vs 30 pct O/D but a lot of the transit also stays a few days as UAE is an attractive place to spend a couple of days
$30 Billion…guess the price of gas will go up again
I think that this is far from the craziest thing Saudi Arabia has done. The largest growth opportunities remain in Asia, and the principal Asian carriers (CX, JL, ANA, CS, CA, etc.) have almost disappeared from the market, remain financially hobbled, and/or sit in hubs that will remain essentially inaccessible to foreigners through the foreseeable future. Saudi Arabia’s goal isn’t to turn a profit but to deploy and preserve capital, and this should be an easily attainable goal given its geographic advantages and financial strength. I’ll gladly fly through Riyadh before flying through Hong Kong and needing to test to get out the door of the airport should I misconnect or have a long layover (and wind up in quarantine jail if I get unlucky).
Calling for there to be a Christian version of Saudi Arabia in the US?
That kind of call is to be expected from traitorous Trump-supporting wannabe insurrectionists, given such persons’ lack of respect for the US Constitution, the rule of law and democracy.
@Tocqueville – thanks for the video- a 170km long building? Fascinating, though I couldn’t help but agree with the first comment, “This feels like the video you see in the first act of a sci fi movie before everything goes to hell in the second.”
@Mak- CX, JAL, ANA and more importantly SQ and Qantas are flying fine now, at least no more restrictions than exist on a potential Saudi airlines. No one I know would ever fly Air Saudi, and I’ve actually been there.
So this idea ranks somewhere below LIV, but possibly above The Line…
Perhaps things have changed in Saudi Arabia but when comparing cities Dharan was always more liberal than Riyadh, Taif and Jeddah. PanAm, the only US airline that operated into Saudi Arabia, flew into DHA. PA 024/025 nonstop JFK with B747SP. Lots of ARAMCO passengers.