Remember the crazy old days when there seemed to be no limit to Middle East carrier growth possibilities? It was completely insane. I mean, come on… Etihad effectively took over Alitalia and there’s nothing more insane than that. This madness may have fallen off, but the Saudis did not get the memo. Nay, they are ready to go ahead and build a new mega-airline. Why? I have no idea, but I’m going to take a swing at it anyway.
This newest airline will be called Riyadh Air, and it will be based in Jeddah. No it won’t. It would be crazy to call something Riyadh Air that’s not based in Riyadh, but then again, this whole thing is crazy, so I don’t blame you if you briefly considered the possibility.
The plan is for Riyadh Air to fly to over 100 destinations globally with at least 39 airplanes. I say “at least” because the first order from Boeing has been announced, and it includes a lot of options. We also don’t know how many more orders are coming, but they’ll need a lot more airplanes to get to that 100 global destination number.
Riyadh Air will be wholly-owned by the Saudi Public Investment Fund (PIF) which has more and more become Crown Prince Mohammad bin Salman’s (MBS) slush fund to diversify the Saudi economy away from oil. The press release says the plan will be this:
The new national carrier will leverage Saudi Arabia’s strategic geographic location between the three continents of Asia, Africa and Europe, enabling Riyadh to become a gateway to the world and a global destination for transportation, trade, and tourism.
Replace Riyadh with Dubai, Abu Dhabi, or Doha and you could use this to describe a whole bunch of airlines in that region.
The airline is not only recycling old ideas, but it’s recycling CEOs. Tony Douglas will take the helm at Riyadh Air. Tony’s primary background is on the airport side, but he did run the show at Etihad back in 2018 until late last year. The funny thing is that Tony was brought into Etihad to clean up the bloated, money-losing mess that James Hogan created (under the Emirate’s direction, to be fair). Now Tony is being asked to create his own bloated, money-losing mess.
But doesn’t Saudi Arabia already have a large airline? It sure does. That’s the airline that we’re once again calling Saudia these days. Saudia is a global airline…
And it’s a pretty big provider of domestic service as well…
In case it’s not clear, that point in the center of the country where a lot of the lines go? That’s Riyadh. In the month of May, Saudia will have 15,223 flights, of which 3,853 touch Riyadh. Yes, 4,220 touch Jeddah which is the airline’s home base, so Riyadh comes in second place. And let’s be honest, no self-respecting kingdom would have Riyadh served by a Jeddah-based airline. That’s just an outrage that desperately needed to be fixed.
Saudia has nearly 150 planes with orders to grow that by 50 percent. This includes a brand-spanking new order place this week for 39 Boeing 787s with options for 10 more. Bizarrely, this was a joint order in which Riyadh Air also ordered 39 Boeing 787s, but it has options for 33 more. So take that, Saudia.
If you’re confused by all of this, join the club. I’ve seen many people grasping at straws, trying to understand why this is happening. In all seriousness, here is my best guess.
Even though the PIF is supposed to be able to operate independently, it is truly a black box and the assumption is that MBS pulls the strings as he sees fit. And though Saudia is owned by the government, it is probably concerned more about fulfilling its mission of connecting domestic passengers and providing travel for Hajj and ʿUmrah. There’s probably too much actual mission there for it to fulfill MBS’s dreams of global hub domination, so he’ll just start over with a blank slate over which he can exert full control.
That may not be a great excuse, but it’s the best I have so far. And in case there was any doubt, Riyadh Air will be wildly successful. Oh sure, it will lose a ton of money, but like many airlines before, it will eventually bring millions of people into and through Saudi Arabia, feeding the country’s big ambitions. And then one day, the government will decide to shift is priorities, and Riyadh Air will become a burden. The only question is whether it will be big enough to stand on its own or if it will shrink to nothing when that time comes.