Air Arabia to Launch New Low-Cost Airline in Saudi Arabia

dailyblitz.de 6 hours ago

DAMMAM— Air Arabia (G9), the UAE-based low-cost carrier (LCC), has received approval to establish a new national budget airline in Saudi Arabia. The license was awarded through a competitive process led by the Saudi General Authority of Civil Aviation (GACA).

The airline will be headquartered in Dammam and operate from King Fahd International Airport (DMM), with plans to begin services shortly. The project involves collaboration with Saudi-based investor companies.

Nesma Group and Kun Investment Holding are forming a consortium with Air Arabia that will oversee the new airline’s development and operations. This will be Air Arabia’s sixth joint venture after launching similar carriers in Egypt, Morocco, Armenia, Pakistan, and its base in Sharjah.

Air Arabia New LCC in Saudi Arabia

Air Arabia plans to operate a fleet of 45 aircraft through the new airline by the time its hub in Dammam grows significantly by 2030. The airline plans to operate a network of 81 routes, which will comprise 24 domestic and 57 international destinations.

Air Arabia is targeting 10 million passengers annually and aims to support more than 2,400 direct jobs across multiple operational domains, including flight crews, technical staff, and airport services.

The expansion will improve air travel options from the Eastern Province of Saudi Arabia, a region that currently has limited connectivity compared to major hubs like Riyadh and Jeddah.

With Dammam as its base, the airline plans to serve underserved routes within Saudi Arabia while adding short- and medium-haul international destinations.

Air Arabia’s Fit with Saudi Aviation Policy

The move aligns with the Saudi Aviation Strategy, which is part of the broader Vision 2030 plan to diversify the national economy. The Kingdom has set a goal to increase annual passenger traffic to 330 million and triple airport capacity by the end of the decade.

The new airline is expected to help meet these objectives by offering cost-effective travel options. This should help in improving access to and from Dammam and other regional airports. Air Arabia will be responsible for airline operations and customer-facing services. This includes aircraft maintenance, scheduling, crew management, and digital booking platforms.

Nesma Group and Kun Investment Holding will help Air Arabia by providing capital investment and handling regulatory coordination within Saudi Arabia.

Regional Competition and Operational Positioning

With Air Arabia’s entry into Saudi Arabia, it will become part of a market that already includes other low-cost operators. Saudi Arabia has other low-cost carriers in the country, such as Flynas and Flyadeal.

However, basing the new airline in Dammam gives it a unique position in the Eastern Province. Dammam appears to be underserved as well, despite its potential.

Saudi Arabia’s eastern region has large expatriate communities and proximity to Gulf countries like Bahrain and the UAE. This creates potential for strong cross-border demand.

The airline will likely be focusing on high-density labor routes, leisure destinations, and religious traffic. The focus will be particularly on travel to and from South Asia and the Middle East.

The details about the branding and the exact name of the new airline are yet to be disclosed. The aircraft deliveries and regulatory work will likely proceed in phases through the remainder of this decade.

Bottom line

The Saudi government’s decision to partner with Air Arabia signals confidence in the carrier’s operational track record. The airline has a history of managing low-cost ventures well. The new airline’s entry into the Saudi market is actually a good addition to the existing airline ecosystem.

This shows a calculated step taken by Air Arabia. The airline is trying to decentralize air access away from the already busy Riyadh and Jeddah Airports. This way, Air Arabia will have less competition and bring Dammam airport into active commercial use.

If the project proceeds on schedule, the Dammam-based airline will be operational shortly and will be booming by 2030. The addition of substantial capacity to the Kingdom’s aviation sector will further intensify competition in the Gulf’s already active low-cost market.

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