Saudi aviation sector soaring after record growth, major expansions

Saudi aviation sector soaring after record growth, major expansions
Riyadh Air is set to commence operations in 2025. Shutterstock
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Updated 03 January 2025
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Saudi aviation sector soaring after record growth, major expansions

Saudi aviation sector soaring after record growth, major expansions

JEDDAH: Saudi Arabia’s aviation sector reached new heights over the past 12 months, marked by a surge in passenger numbers, a fleet expansion with new jet acquisitions, and strategic global partnerships.

These advancements are part of a broader vision to establish the Kingdom as a global aviation hub and a top-tier destination for travelers worldwide.

Saudi Arabia is investing billions of dollars as part of its Vision 2030 plan to diversify its economy away from fossil fuels, boosting its private sector, and enhancing connectivity, as well as solidifying its role in the global aviation industry.

As part of this plan, aviation goals for the Kingdom include delivering seamless experiences to 330 million passengers across over 250 destinations, and the transportation of 4.5 million tons of air cargo by 2030.

“This transformative strategy offers lucrative opportunities for the private sector to contribute to the realization of the country’s ambitions,” said President of the General Authority of Civil Aviation Abdulaziz bin Abdullah Al-Duailej.

He added that among these opportunities are the privatization potential of 27 airports, which are currently in preparation for transfer to private ownership.

“Moreover, numerous aircraft requests and destination openings have been approved, providing further avenues for private sector involvement in the sector’s growth and development.” Al-Duailej added.

Passenger numbers and air freight volume surges

Between January and September, Saudi Arabia’s aviation sector achieved record growth, with passenger numbers reaching 94 million, accounting for a 15 percent increase.

The number of flights also saw a 10 percent rise compared to 2023, while air freight volumes approached 1 million tonnes, reflecting a 52 percent increase.

These achievements were announced at GACA’s 14th Steering Committee Meeting for activating the National Strategy for the Aviation Sector, held in October in Dammam.

GACA President Abdulaziz bin Al-Duailej highlighted the expansion of air connectivity during this period, with flights departing to over 150 destinations weekly.

Saudi business aviation soars with Vision 2030 growth

Saudi Arabia’s business aviation sector is booming, driven by the Kingdom’s expanding economy, major government infrastructure investments, and a rising influx of high-net-worth individuals.

Valued at $1.2 billion in 2023, the sector is expected to grow at a compound annual rate of 8.88 percent from 2025 to 2029.

The growth was highlighted in the GACA’s roadmap, unveiled at Riyadh’s Future Aviation Forum in May.

Global firms tapped for King Salman Airport expansion




An image of how King Salman International Airport will look after it has been developed. File

In 2024, global firms such as Foster & Partners, Jacobs Engineering, Mace, and Nera were selected for the next phase of King Salman International Airport’s development in Riyadh.

Led by the King Salman International Airport Development Co., a subsidiary of the Kingdom’s Public Investment Fund, the collaborations will support the airport’s expansion, positioning it as a key hub for tourism and transportation.

Riyadh Air expands fleet, partnerships ahead of 2025 launch

In October, Riyadh Air signed an agreement to purchase 60 Airbus A321neo single-aisle aircraft as it plans to commence its operations in 2025. 

The deal was signed at the 8th Future Investment Initiative in Riyadh.

In the same month the company said that it had plans to order wide-body aircraft capable of seating more than 300 passengers in 2025.

In August, the new airline announced it had secured a multi-year agreement to become the official airline partner of Concacaf, the FIFA Confederation for North, Central America, and the Caribbean.

The deal aims to enhance the airline’s presence in global sports and support Concacaf’s national and club competitions across the Americas. 

In June, Riyadh Air signed agreements with Singapore Airlines and Air China, to establish strategic partnerships and expand its global network.

The agreements focus on interline connectivity, codeshare, frequent flyer programs, cargo services, customer experience, and digital innovation.

The company partnered with China Eastern Airlines to enhance connectivity and digital transformation and with Delta Air Lines to expand North American routes.

In April, the carrier announced a partnership with Artefact to build a data analytics platform and develop AI solutions, enabling hyper-personalization, improved guest experiences, and optimized operations. 

The collaboration aims to revolutionize Saudi aviation through advanced artificial intelligence applications.

“Through AI integration, we aim to redefine travel standards, offering personalized, seamless digital-first experience to our guests ahead of our maiden flight in 2025,” Abe Dev, the airline’s vice president of digital and innovation said.

In May, the airline said it had plans to bolster its aircraft lineup through additional orders, as it requires “a very large fleet” to establish itself alongside regional giants, according to its CEO Tony Douglas.

This move comes as the Kingdom’s second flag carrier ordered 39 Boeing 787-9 jets in 2023, with options for 33 more. “We’re going to make a number of additional orders,” Douglas said.

The airline’s initial destinations will include major cities in Europe, the US East Coast, and Canada, with the inaugural flight scheduled to depart by June 2025.

Saudia boosts aviation with key partnerships, fleet growth




The signing ceremony was attended by French President Emmanuel Macron, Saudi Arabian Airlines Corp. Chairman Saleh Al-Jasser, Saudia Group Director Gen. Ibrahim Al-Omar, and several other dignitaries and ministers. SPA

In December, Saudia entered a strategic partnership with Air France-KLM to expand and localize its maintenance, repair, and overhaul capabilities. This collaboration aims to enhance the Kingdom’s aviation infrastructure and contribute to its economic growth.

In July, the Saudia Group and German aerospace company Lilium NV, developer of fully electric vertical takeoff and landing aircraft, entered into an agreement to purchase 50 confirmed Lilium Jets, with an option for an additional 50 aircraft. The deal will make the Saudi carrier the first airline in the region to invest in sustainable air mobility.

In May, Saudia and Riyadh Air signed an agreement during the Future Aviation Forum to collaborate on training aviation professionals.

During the same event, Saudia Group announced a $19 billion order for 105 A320neo family aircraft, the largest Airbus deal in Saudi history. The planes, including A320neo and A321neo models, will be split between Saudia and its low-cost carrier flyadeal, with deliveries starting in early 2026.

Flyadeal receives first owned plane, aims for 100 by 2030

In 2024, Saudia’s low-cost airline flyadeal took delivery of its first wholly-owned aircraft, an Airbus A320neo.

Announcing the milestone in June, the airline revealed plans to expand its fleet to around 50 aircraft by the end of 2025, doubling to 100 by 2030. As part of its growth strategy, flyadeal also launched seven weekly flights between Riyadh and Sarajevo, utilizing an Airbus A320.

Looking ahead, the airline announced the addition of three new domestic routes starting January. Services from Dammam to Najran and four weekly flights to Tabuk commenced on Jan. 1, followed by three weekly flights to Yanbu starting from Jan. 2.

Flynas secures 280-aircraft deal amid record growth

Flynas, named the Best Low-Cost Airline in the Middle East for the seventh consecutive year, reported a 47 percent rise in passenger numbers, exceeding 7 million in the first half of 2024.

In November, the airline announced new African routes, with flights from Riyadh to Entebbe, Uganda, and Jeddah to Djibouti starting Jan. 8, 2025, under its “We Connect the World to the Kingdom” initiative.

In July, Flynas signed a deal at the Farnborough Airshow to purchase 160 Airbus aircraft, doubling its orders to 280 planes, including 30 wide-body A330neo and 130 narrow-body A320 models. The carrier also celebrated receiving its 53rd A320neo as part of a SR32 billion ($8.5 billion) order for 120 planes.


Saudi Cabinet approves new law to regulate petroleum, petchem sector

Saudi Cabinet approves new law to regulate petroleum, petchem sector
Updated 07 January 2025
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Saudi Cabinet approves new law to regulate petroleum, petchem sector

Saudi Cabinet approves new law to regulate petroleum, petchem sector

RIYADH: Saudi Arabia’s Cabinet has approved a new Petroleum and Petrochemical Law to ensure a reliable and secure supply of products within the Kingdom.

The law, which was approved on Jan. 7, is designed to optimize the use of raw materials in the sector and support the localization of the value chain, according to a report by the Saudi Press Agency.

The new legislation will replace the existing Petroleum Products Trade Law and is expected to achieve several key objectives, including regulating petroleum and petrochemical operations. It aims to accelerate the sector’s growth, foster economic development, and encourage increased investment in the industry.

Upon the law’s approval, Saudi Arabia’s Minister of Energy Prince Abdulaziz bin Salman expressed gratitude to the Cabinet, emphasizing that the law would help establish a robust legislative framework for the Kingdom’s energy sector. He added that the new directive would facilitate the optimal use of petroleum and petrochemical resources.

The law will regulate the use, sale, purchase, and transportation of petrochemical products, as well as oversee the operation of distribution stations and petrochemical facilities, the Saudi Press Agency report noted.

In addition to the Petroleum and Petrochemical Law, the Cabinet approved several other agreements on Jan. 7. These include a memorandum of understanding for cooperation between Saudi Arabia’s Ministry of Justice and Singapore’s Ministry of Law, an MoU on health cooperation with Morocco’s Ministry of Health and Social Protection, and an MoU to strengthen digital government collaboration between Saudi Arabia’s Digital Government Authority and Qatar’s Ministry of Communications and Information Technology.

The Cabinet also endorsed an air services agreement between Saudi Arabia and Eswatini, a Southern African nation.

Furthermore, the Cabinet reviewed ongoing development programs and projects aimed at diversifying the Kingdom’s economy, exploring new revenue streams, and maximizing the use of available resources.


EV maker Lucid becomes first global automotive manufacturing company to join ‘Made in Saudi’ program

EV maker Lucid becomes first global automotive manufacturing company to join ‘Made in Saudi’ program
Updated 07 January 2025
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EV maker Lucid becomes first global automotive manufacturing company to join ‘Made in Saudi’ program

EV maker Lucid becomes first global automotive manufacturing company to join ‘Made in Saudi’ program
  • Aims to increase industrial sector’s contribution to GDP to at least 20% by 2025
  • Move seeks to attract additional investments, enhance non-oil exports, and create sustainable job opportunities

RIYADH: Electric vehicle manufacturer Lucid Motors has become the first global automotive company to join the Kingdom’s “Made in Saudi” program as the country continues strengthening its industrial capabilities. 

The milestone grants Lucid the right to use the “Saudi Made” label on its products, symbolizing the nation’s focus on quality and innovation. 

The strategy aims to increase the industrial sector’s contribution to the gross domestic product to at least 20 percent by 2025, tripling the current industrial base. 

It also seeks to attract additional investments, enhance non-oil exports, and create sustainable job opportunities, aligning with Vision 2030’s economic diversification goal.

“This is a step that represents a strong push to enhance the image of the national industry and attract investments and global companies, which consolidates the Kingdom’s position as a global center for innovative manufacturing,” Minister of Industry and Mineral Resources Bandar Alkhorayef said in a post on his X account. 

In a separate statement, the minister said that Lucid Motors’ inclusion in the program underscores Saudi Arabia’s strategic transformation toward creating a fully integrated electric vehicle manufacturing ecosystem. 

The minister added that this initiative aligns with the objectives of the National Industrial Strategy, which focuses on empowering promising sectors and attracting high-value investments in advanced industries.

Lucid’s participation in the program follows the launch of its first international manufacturing plant in Saudi Arabia in Sept. 2023. 

Located in King Abdullah Economic City, the facility is the Kingdom’s first-ever car manufacturing plant and represents a key milestone in its efforts to build a domestic automotive industry. 

The facility can currently assemble 5,000 Lucid vehicles annually during its first phase. Once fully operational, the complete manufacturing plant, including the assembly line, is expected to produce up to 155,000 electric cars per year. 

Saudi Arabia is aggressively promoting the adoption of electric vehicles as part of its Vision 2030 strategy, which aims to achieve net-zero carbon emissions by 2060. 

A critical target of the initiative is for 30 percent of all vehicles in Riyadh to be electric by 2030, contributing to a broader goal of reducing emissions in the capital by 50 percent. 

To support the transition, the Public Investment Fund — a major backer of Lucid Motors — has been instrumental in establishing a domestic EV manufacturing sector. 

In addition to its stake in Lucid Motors, PIF has launched Ceer, the Kingdom’s first locally branded electric vehicle manufacturer, as part of its efforts to bolster the industry. 

Infrastructure development is also a core focus, with the Kingdom planning to deploy 5,000 fast chargers across Saudi Arabia by 2030 to facilitate the adoption of EVs. 

Consumer interest in EVs is steadily growing, with over 40 percent of Saudi consumers considering purchasing an electric vehicle within the next three years, according to a 2024 report by London-based professional services network PwC. 

Faisal Sultan, vice president and managing director for the Middle East at Lucid Motors, expressed the company’s pride in joining the program, saying: “We are delighted to join the ‘Made in Saudi’ program and have the honor of using the ‘Saudi Made’ label, which represents quality and excellence.”

He added: “We are committed to embodying the values of this national identity, such as sustainability, innovation, and excellence. With the increasing focus on electric vehicles in the Kingdom, we aim to deliver an advanced and unique experience to our customers.”

The minister said that Saudi Arabia has emerged as a central hub for electric vehicle production, supported by modern infrastructure, incentivizing policies, and a highly skilled workforce. 

He also said that major players like Lucid Motors strengthen the Kingdom’s position as a global center for future-focused industries while contributing to increased local content, non-oil exports, industrial localization, and knowledge transfer. 

Launched in March 2021, Saudi Arabia’s Made in Saudi program promotes domestic products and services, encouraging local consumption and boosting non-oil exports. 

The move aligns with Saudi Arabia’s broader industrial strategy, which aims to increase the sector’s gross domestic product contribution to 20 percent by 2025 and drive investments in advanced industries. 

It also supports Vision 2030’s goal of reducing the nation’s reliance on oil by fostering high-value sectors like electric vehicle manufacturing.


Closing Bell: Tadawul maintains upward momentum, closes at 12,113

Closing Bell: Tadawul maintains upward momentum, closes at 12,113
Updated 07 January 2025
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Closing Bell: Tadawul maintains upward momentum, closes at 12,113

Closing Bell: Tadawul maintains upward momentum, closes at 12,113
  • Parallel market Nomu dropped 54.97 points, ending the session at 30,809.12
  • MSCI Tadawul Index rose by 3.48 points to reach 1,514.39

RIYADH: Saudi Arabia’s Tadawul All Share Index extended its upward trajectory for the second consecutive day on Tuesday, rising by 8.60 points, or 0.07 percent, to close at 12,113.29.

The benchmark index recorded a total trading turnover of SR7.71 billion ($2.05 billion), with 124 stocks advancing, while 110 saw declines.

In contrast, the Kingdom’s parallel market, Nomu, dropped 54.97 points, ending the session at 30,809.12. The MSCI Tadawul Index also gained ground, rising by 3.48 points to reach 1,514.39.

The standout performer of the day was Almoosa Health Co., which made its debut on the main market. The stock surged by an impressive 14.96 percent, closing at SR146. Other notable gainers included Al Mawarid Manpower Co. and Saudi Reinsurance Co., whose share prices climbed by 10 percent and 9.23 percent, closing at SR125.40 and SR63.90, respectively.

On the flip side, Al-Baha Investment and Development Co. saw its share price fall by 4.44 percent, ending the day at SR0.43.

On the announcements front, Filling and Packing Materials Manufacturing Co. announced it had signed a Shariah-compliant credit facility agreement worth SR50 million with Al Rajhi Bank to finance its working capital.

According to a statement on Tadawul, the 12-month credit facility is backed by a promissory note covering its entire value. FIPCO clarified that there are no related parties involved in the agreement. The company’s stock inched up by 0.44 percent, closing at SR45.70.

Meanwhile, LIVA Insurance Co. revealed it had received a Baa2 insurance financial strength rating with a stable outlook from Moody’s. The rating reflects the company’s strong capital adequacy, solid asset quality, and conservative investment strategy, alongside moderate reserve risk.

LIVA emphasized that the rating underscores Moody’s confidence in the company’s enhanced underwriting discipline and its ability to maintain profitability and growth within the Saudi market. A Baa2 rating is considered medium-grade, indicating a company’s acceptable ability to meet short-term debt obligations. LIVA’s stock gained 0.57 percent, closing at SR17.60.


Saudi Arabia eases domestic worker quotas for HR firms

Saudi Arabia eases domestic worker quotas for HR firms
Updated 07 January 2025
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Saudi Arabia eases domestic worker quotas for HR firms

Saudi Arabia eases domestic worker quotas for HR firms
  • Only firms with 3,000 workers or fewer now have to meet the threshold
  • Firms with more than 15,000 workers are fully exempt from any domestic worker quota

RIYADH: Human resources firms in Saudi Arabia have welcomed the reform of a rule that required 30 percent of all employees to be domestic workers.

The change to the law, announced by the Ministry of Human Resources and Social Development, means that only firms with 3,000 workers or fewer now have to meet that threshold.

Those with a workforce ranging from 3,001 to 10,000 workers will instead be obligated to maintain a reduced quota of 20 percent, with that level dropping to 10 percent for companies with staffing levels between 10,001 to 15,000.

Firms with more than 15,000 workers are fully exempt from any domestic worker quota.

This policy shift is expected to balance supply and demand in the support workers sector, improving its legislative environment. 

It comes at a time when Saudi Arabia’s human resources management market is experiencing rapid growth, and prior to this decision market research firm Horizon Grand View Research projected the sector would expand by a compound annual growth rate of 11.1 percent from 2024 to 2030.

Companies affected by the changes issued statements on Tadawul welcoming the new rules, with Mawarid Manpower Co. stating that “this decision will have an impact on the company’s business, as it will alleviate the company’s obligation to recruit a specific percentage of the total workforce.”

Similarly, Saudi Manpower Solutions Co., also known a SMASCO, highlighted that “this decision aims to achieve a balance between supply and demand, thereby improving the legislative environment for the support (domestic) workers sector.”

Maharah Human Resources Co., which employs over 15,000 domestic workers, said that “it is not required currently to comply with any percentage for the household workers out of the total workforce.”

The company highlighted the cost-saving benefits of the new system, noting that “it is expected that this decision will have an impact on the company’s long-term business, as it will alleviate the company’s obligation to recruit a specific percentage of the total workforce and reduce recruitment costs for household resources to ensure compliance with previous percentages.” 

Additionally, the firm stated that the amendment “gives the company the ability to increase the workforce in the corporate sector to meet the growing demand without any constraints limiting that.”

The reform reflects Saudi Arabia’s broader efforts to modernize labor laws and streamline operations across key sectors. 


Saudi Arabia sees 45% annual growth in domestic flight bookings: report 

Saudi Arabia sees 45% annual growth in domestic flight bookings: report 
Updated 07 January 2025
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Saudi Arabia sees 45% annual growth in domestic flight bookings: report 

Saudi Arabia sees 45% annual growth in domestic flight bookings: report 
  • Domestic room night bookings also saw 39% yearly growth
  • Cities such as Makkah, Riyadh, Jeddah, Al-Khobar, and Madinah remain key attractions

RIYADH: Saudi Arabia recorded a 45 percent annual growth in domestic flight bookings in 2024, fueled by the Kingdom’s expanding tourism offerings and increased connectivity through low-cost carriers. 

According to Almosafer’s latest travel trend report, domestic room night bookings also saw 39 percent yearly growth. Additionally, combined domestic flight and hotel reservations contributed over 40 percent to the overall travel market, an 11 percent yearly increase. 

The growth in domestic travel is largely driven by a broader range of destinations, accommodation options, and experiences that continue to attract leisure visitors to explore their home country. Family and group travel have been key contributors to this upward trend, with bookings in these segments surging by over 70 percent.

Commenting on the trends, Muzzammil Ahussain, CEO of Almosafer, said: “These travel trends align seamlessly with the government’s vision to enhance in-destination value and increase domestic tourism as part of Vision 2030.”

Cities such as Makkah, Riyadh, Jeddah, Al-Khobar, and Madinah remain key attractions. 

However, emerging destinations like Abha, Al Jubail, and Jazan, as well as Tabuk and Hail, are gaining momentum due to their distinct offerings, including mountain views, beaches, landscapes, and desert experiences. 

“The growth of domestic tourism and the rise of family and group trips, with a focus on unique accommodation experiences and rich in-destination activities, showcase the success of the national agenda of building a thriving leisure tourism sector that contributes significantly to the economy,” Ahussain added.

Almosafer’s report highlights a notable shift in traveler preferences for accommodations. While luxury remains prominent, with 36 percent of room nights booked in five-star properties, budget-friendly stays in three-star or lower hotels now represent 35 percent of total bookings — a segment that has grown 100 percent for families and groups. 

Alternative accommodations such as vacation rentals and hotel apartments have also gained traction, with family bookings rising 90 percent and group reservations increasing 60 percent, reflecting growing demand for flexible and affordable lodging options. 

Low-cost airlines have also played a crucial role in the domestic travel boom. Increased capacity, expanded connectivity, and additional routes have made budget carriers more accessible to cost-conscious travelers. 

While flight bookings grew by 45 percent, the average order value decreased by 7 percent, demonstrating how expanded options are enabling travelers to secure more cost-effective deals. 

In-destination activities have become a cornerstone of travel value, with visitors increasingly opting for guided tours, adventure sports, and cultural experiences. 

Booking behavior also evolved in 2024, with mobile platforms dominating the market. App bookings grew by 67 percent and accounted for 76 percent of total bookings, while web reservations contributed 17 percent, reflecting 7 percent growth. 

Retail bookings, though representing a smaller 7 percent share, remain relevant for complex and higher-value itineraries as travelers seek in-person assistance for personalized planning. 

Flexible payment options have further transformed the travel market. Buy now, pay later plans have gained popularity, while Apple Pay accounted for 44 percent of all domestic bookings processed in 2024, reflecting the growing adoption of digital payment methods.