Saudi Arabia plans new airline to challenge Emirates, Qatar Airways

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Saudi Arabia plans to launch a second national airline in an effort to bring economic diversification by turning the oil-rich country into a global logistic hub.

Saudi Crown Prince Mohammed bin Salman (MBS), who is spearheading a campaign to raise non-oil revenues to about 45 billion riyals ($12bn) by 2030 and create jobs for citizens, announced the plan on Tuesday, giving a challenge to regional rival UAE’s Emirates and Qatar Airways.

The investment in the airline, about which no further details have been shared, aims at making the kingdom the fifth-biggest air transit hub.

Two people familiar with the matter told Reuter the new national airline would multiply international routes and echo existing Gulf carriers by carrying people from one country to another via connections in the kingdom, known in the industry as sixth-freedom traffic.

According to state-run news agency SPA, the decision to make the kingdom a global logistics hub would boost the contribution of transport and logistics sector to GDP to 10% from existing 6%.

“The comprehensive strategy aims to position Saudi Arabia as a global logistics hub connecting the three continents,” MBS was quoted as saying in the SPA report.

“This will help other sectors like tourism, Hajj and Umrah to achieve their national targets.”

The launch of the new airline will boost the number of international destinations to more than 250 from Saudi Arabia, besides doubling air cargo capacity.

The Kingdom currently owns Saudi Arabian Airlines, the smallest carrier in the region.

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