Private aviation soars in Saudi Arabia as more businesses take to the skies

The Red Sea International Airport, located within three hours’ flying time of 250 million people, launched its first international flights earlier this year. (Supplied)
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Updated 27 May 2024
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Private aviation soars in Saudi Arabia as more businesses take to the skies

  • Sector set to grow at compounded annual growth rate of 8.88 percent between 2025 and 2029

RIYADH: Saudi Arabia’s business aviation sector is experiencing a surge fueled by the Kingdom’s expanding economy, significant government investment on infrastructure, and a growing influx of high-net-worth individuals.

Valued at $1.2 billion in 2023 according to TechSCI research, this segment is projected to grow at a compounded annual growth rate of 8.88 percent between 2025 and 2029.

It was also highlighted in the General Authority of Civil Aviation’s roadmap unveiled at Riyadh’s Future Aviation Forum in May.

The roadmap aims to support the Kingdom’s development as a global high-value business and tourist destination.

Additionally, it targets a tenfold increase in the contribution to gross domestic product by the general aviation sector to $2 billion by 2030, covering the business jet segment, including charter, private, and corporate planes.

Farid Gharzeddine, captain and CEO of Dubai based private jet company SkyMark Executive, told Arab News: “Saudi Arabia’s private aviation and charter business have always been thriving, serving individuals, business executives, government officials, and special missions.”




Farid Gharzeddine, Captain and CEO of SkyMark Executive. (Supplied)

He added: “In 2023, this sector experienced significant growth driven by the Kingdom’s Vision 2030 and its efforts to diversify away from oil, particularly through the promotion of sectors such as tourism and entertainment. These initiatives had a substantial impact on the private charter industry, influencing both destinations and clientele.”

During this timeframe, he explained that SkyMark Executive, functioning as a private aircraft provider, observed a significant uptick in requests for flights transporting tourists, entertainers, and artists from abroad to emerging destinations such as AlUla, the Red Sea airport, and others.

The Red Sea International Airport, located within three hours’ flying time of 250 million people, launched its first international flights earlier this year.

With a capacity to serve 1 million guests annually, according to the group’s CEO John Pagano, this milestone marks a significant step towards establishing Saudi Arabia as a premier global tourism destination.

According to a research by Mortor intelligence, the GCC region is highly promising for business aviation, and is also a lucrative market for the private aviation sector, due to the presence of a large number of high net worth and ultra-high net worth individuals in the region.

The influx of multinational companies establishing regional headquarters in Riyadh, driven by the Kingdom's efforts to increase foreign direct investment, may have boosted demand for private aviation. This stems from the need for efficient, flexible travel options for corporate executives and high-net-worth individuals, fueling growth in private jet and charter services.

Players are investing in technological advancements to enhance aircraft manufacturing, navigation, and maintenance, anticipating growth in demand for new business jet models offering increased cabin space and long-range capabilities.

Manufacturers such as Gulfstream, Bombardier, and Embraer are focusing on luxury, technology, and performance enhancements to appeal to GCC customers, positioning themselves for growth in the forecast period.




Manufacturers are focusing on luxury, technology, and performance enhancements to appeal to GCC customers, positioning themselves for growth in the forecast period. (Supplied)

Evidence of this is Qatar Executive’s position as the largest operator in the world for two new models from Gulfstream, G500 and G650ER.

Gharzeddine commented that his company’s clients from Saudi Arabia are often one of the most discerning clientele and prioritize state-of-the-art technological advancements when selecting aircraft for their travel needs.

“These clients prioritize excellence in service delivery, emphasizing both technological sophistication and exceptional service standards. They are committed to enhancing their travel experiences to achieve the utmost levels of comfort, safety, and luxury,” he added.

Furthermore, this segment can benefit from Saudi Arabia’s aviation strategy, which aims to expand connectivity to over 250 destinations by 2030. A key component of this plan is privatization, exemplified by the Kingdom's implementation of the first successful public-private partnership model in the Middle East.

GACA also announced during the Future Aviation Forum its targeted investments in six new specialized general aviation airports in the Kingdom, alongside other initiatives.

"These investments are anticipated to enhance infrastructure and service quality within the private aviation sector, making it more appealing to high-net-worth individuals and corporate clients," Gharzeddine commented.

"Improved facilities and services will likely drive increased demand for private jet charters and ownership, boosting the overall efficiency and capacity of the aviation sector. Additionally, these developments will help position Saudi Arabia as a key hub for private aviation in the Gulf region," he added.

Charter business and sustainability

Leading the change in sustainable aviation growth, Saudi Arabia announced its finalization of a comprehensive plan in November to address environmental sustainability within its civil aviation sector, in line with international commitments such as the 2015 Paris  Agreement.

Spearheaded by GACA, the Civil Aviation Environmental Sustainability Plan targets the reduction of greenhouse gas releases, with a zero-emissions goal by 2060.

Saudi Arabia’s initiatives extend to hydrogen fuel infrastructure and green projects like the Circular Carbon Economy, while major developments such as AMAALA and the Red Sea project reflect a commitment to net-zero emissions.

Global business and government leaders consider sustainable aviation fuel a key opportunity for significant reductions in air travel emissions, with numerous initiatives underway to make this energy product a reality.

SAF is derived from renewable hydrocarbon sources and can reduce carbon emissions by 75 percent compared to traditional fossil-based jet fuel.

However, the primary challenge is supply and demand, as production needs to increase significantly to meet the set targets by 2030.

According to Gharzeddine, in addition to the limited supply, achieving economies of scale to reduce production costs is also an ongoing issue, as is the high charge of specialized processing required for biofuels.

Maryam Al-Balooshi, the UAE’s lead negotiator for aviation climate change, also emphasized the urgent need for Gulf countries to produce SAF to compete in the Western-dominated market and support greener flights, as reported by the National News in February.

An important aspect to consider is how technology and artificial intelligence can play pivotal roles in driving sustainable aviation. Advanced flight planning systems use AI to optimize flight paths, reducing fuel consumption and minimizing carbon emissions.

“By analyzing weather patterns, air traffic, and aircraft performance in real-time, AI can suggest more efficient routes and altitudes, ensuring flights operate at maximum efficiency,” Gharzeddine explained.

Predictive maintenance powered by AI also enhances sustainability by identifying potential issues before they become significant problems, thereby reducing downtime and extending the lifespan of aircraft components.

Additionally, AI-driven data analytics can help monitor and manage the carbon footprint of each flight, enabling operators to make informed decisions about fuel usage, weight management, and other factors that influence emissions.

By leveraging advanced technology, AI, and SAF, the private aviation sector in Saudi Arabia can meet growing demand while setting a benchmark for sustainability in the global aviation industry.


PIF launches commercial paper program to diversify funding sources

Updated 12 sec ago
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PIF launches commercial paper program to diversify funding sources

RIYADH: Saudi Arabia’s Public Investment Fund has launched its first commercial paper program, introducing a new tool to diversify its funding sources and enhance short-term liquidity management.

A commercial paper is a debt instrument used to raise short-term funding, offering faster access to funds than traditional loans. It is widely used in global financial markets, offering PIF greater flexibility in meeting its needs while aligning with its dynamic investment priorities.

The CP program will enable PIF to issue short-term debt through offshore special-purpose vehicles, enhancing its liquidity management and complementing its long-term capital-raising initiatives.

According to a press release, the initiative, which includes US and Euro CP sub-programs, has received top-tier credit ratings of Prime-1 from Moody’s and F1+ from Fitch, underscoring its strong financial standing.

PIF has consistently demonstrated its ability to pioneer new financial instruments. In 2022, it became the first sovereign wealth fund globally to issue a green bond, including a landmark century green bond, followed by a successful $3.5 billion sukuk issuance, according to the fund.
 
PIF’s Head of Global Capital Finance and Investment Strategy and Economic Insights, Fahad Al-Saif, emphasized the program’s role in strengthening the fund’s resilient and adaptive financial framework. 

“The establishment of our CP program reflects the continued strength and depth of PIF’s capital raising strategy; one that is dynamic, resilient, and fit for purpose, aligning funding solutions with our long-term investment priorities,” he said.

In a press release, Moody’s Ratings said that the programs will operate under newly established special purpose vehicles, CPDE Investment Co. and CPNL Investment Limited.

“PIF has an excellent liquidity profile,” Moody’s said in its rating rationale, citing the fund’s cash reserves of SR106 billion ($28 billion) and undrawn credit facilities as key strengths.

According to the agency, the USCP program will support maturities of up to 397 days, while the ECP program will cover maturities of up to 364 days, with proceeds earmarked for general corporate purposes.

PIF is Saudi Arabia’s primary investment arm, tasked with advancing economic transformation under Vision 2030. Through strategic partnerships and investments, the fund aims to build future-ready industries, create employment opportunities, and promote sustainable development.

As the driving force behind Saudi Arabia’s Vision 2030, PIF has established 103 companies since 2017, fostering economic diversification and sustainability. 


Saudi Vision 2030 puts government performance at heart of economic growth drive, says minister

Updated 1 min 12 sec ago
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Saudi Vision 2030 puts government performance at heart of economic growth drive, says minister

RIYADH: Saudi Arabia’s Vision 2030 prioritizes enhancing the performance of government bodies and institutions across the public, private, and non-profit sectors, recognizing their vital role in driving economic growth, according to the Kingdom’s economy minister. 

Speaking at the 7th edition of the King Abdulaziz Quality Award, Minister of Economy and Planning Faisal Alibrahim, who also chairs the award’s supervisory committee, said the initiative boosts competitiveness and strengthens the investment climate.

It also drives economic complexity and broadens the reach and quality of services both locally and globally — ultimately generating high-value jobs for the Saudi population, the Saudi Press Agency reported. 

This aligns with the Kingdom’s progress in the 2024 World Competitiveness Yearbook published by the Swiss-based Institute for Management Development, which ranked Saudi Arabia 16th out of 67 of the world’s most competitive countries. The business efficiency axis, in particular, advanced from 13th to 12th place. 

The overall ranking marked a one-position improvement for the Kingdom, driven by gains in business legislation and infrastructure, placing the Kingdom 4th among G20 countries. 

“Today, we celebrate national institutions that have proven that institutional excellence is not a slogan, but rather a strategic choice and a consistent management approach,” Alibrahim said in his remarks during the event.

He added: “The King Abdulaziz Quality Award is not just an occasion for recognition, but rather an ongoing journey to create models, stimulate performance, and raise the ceiling of institutional ambition.” 

Alibrahim highlighted the role of the Saudi National Model for Institutional Excellence, which he described as a practical tool for enhancing capabilities, improving performance, and maximizing institutional impact. 

The model is a framework that promotes organizational excellence across key sectors, using the King Abdulaziz Quality Award as a benchmark. 

It focuses on leadership, strategic planning, and measurable outcomes in areas like academic quality and stakeholder satisfaction, guided by scientific methods and national standards.

Prince Mohammed bin Turki bin Abdullah, secretary-general of the King Abdulaziz Quality Award, said the initiative serves as a national platform to promote positive competition and consolidates the principles of governance. 

A total of 63 organizations were recognized across gold, silver, and bronze categories for their application of high standards in quality, governance, and innovation. 

The gold-level government winners included the Ministry of Health, the Ministry of Human Resources and Social Development, the Saudi Industrial Development Fund, and the General Organization for Social Insurance. Other winners included the Ministry of Transport and Logistics, the Royal Commission for AlUla, and the Council of Cooperative Health Insurance. 

Thirty-four entities were awarded at the bronze level following a comprehensive evaluation process that measured performance, efficiency, and commitment to continuous improvement. 

Saudi Arabia’s quality award program mirrors similar efforts in more than 90 countries and reflects the Kingdom’s ambition to embed institutional excellence into its economic model. 

The King Abdulaziz Quality Award is positioned as the national benchmark for organizational performance, aiming to drive sustained development across key sectors. 


IMF warns US strikes on Iran could disrupt global economy

Updated 14 min 46 sec ago
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IMF warns US strikes on Iran could disrupt global economy

JEDDAH: The International Monetary Fund has warned that US airstrikes on Iran could amplify global economic uncertainty, with potential spillovers far beyond energy markets, its head told Bloomberg on Monday.

IMF Managing Director Kristalina Georgieva said that the fund is closely monitoring the situation in the Middle East, particularly the impact of the conflict on oil and gas prices and supply routes.

Georgieva’s remarks come after the US military conducted targeted strikes on nuclear facility sites in Iran, effectively involving itself in Israel’s campaign to dismantle the country’s nuclear program, despite Tehran’s threats of retaliation that could spark a wider regional conflict.

US President Donald Trump stated that Iran’s key nuclear sites were “completely and fully obliterated” and warned the country against retaliatory attacks, asserting that the US could strike additional targets “with precision, speed and skill.”

Georgieva told Bloomberg that the IMF are looking at this “as another source of uncertainty in what has been a highly uncertain environment” adding that the institution is watching for two things: “One, how would that impact risk premia for oil and gas. There has been some movement upward— how far would it go? And two: would there be any disruption in energy supplies?” 

She went on: “For now, no. But let’s see how events would develop— whether either delivery routes or spillovers to other countries may occur. I pray, no.”

The development saw Brent crude briefly rising by as much as 5.7 percent to $81.40 per barrel during early Asian trading on June 23 before retreating, according to Bloomberg.

When asked whether the transmission mechanism, specifically the channels where she sees the greatest impact of the Middle East shock, is currently reflected in energy prices, the managing director confirmed that it is.

“There could be secondary and tertiary impacts. Let’s say there is more turbulence that goes into hitting growth prospects of large economies, and then you have a trigger impact in a downward revision in prospects for global growth,” she told Bloomberg. 

“As you know, we have already revised downward growth projections for this year, and we will be coming up with our next projections in July.”

Georgieva continued: “What we see in the first two quarters of the year broadly confirms the picture we painted in April, and it is somewhat slower global growth, but no recession.”

The IMF’s April report sounded a warning over the weakening global economy, sharply downgrading growth forecasts from January projections. 

The fund identified surging trade tensions, record-high tariff levels, and rising policy unpredictability as key threats to both short- and long-term economic stability.


Oman to be first Gulf country to impose personal income tax

Updated 11 min 55 sec ago
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Oman to be first Gulf country to impose personal income tax

  • Tax would apply to about 1% of population
  • It will impose 5% levy on taxable income for individuals earning over 42,000 rials

RIYADH: Oman will become the first country in the Gulf to impose a personal income tax, as the oil producer works to diversify its revenue stream. 

The sultanate will impose a 5 percent levy on taxable income for individuals earning over 42,000 Omani rials ($109,091) per year starting from 2028, according to a royal decree.

The Gulf country added that the tax would apply to about 1 percent of the population. 

The move comes after Oman launched a medium-term fiscal program in 2020 to reduce public debt, diversify revenue sources, and spur economic growth, which has improved state finances. 

“The law also includes deductions and exemptions that take into account the social situation in the Sultanate of Oman, such as education, health care, inheritance, zakat, donations, primary housing,” the country’s tax authority said in a statement. 

The law was implemented following an “in-depth study to assess the economic and social impact,” and income data collected from various government entities was used to set the exemption threshold. 

“The results showed that approximately 99 percent of the population in the Sultanate of Oman is not subject to this tax,” the authority said. 

The statement added that the electronic system has been designed to enhance voluntary compliance and is linked with relevant institutions to ensure accurate calculation of individuals’ income and to verify the accuracy of submitted tax returns.

The tax will contribute to achieving social solidarity and will not include wealth, such as land ownership. It will be imposed on the annual income specified by law and includes “all cash amounts and in-kind benefits received by the individual,” the authority said. 

The move aims to complete the tax system in line with the economic and social situation in the sultanate, and the tax revenue will go toward supporting the social protection program, “with sustained cooperation,” it added. 

The move will support the objectives of Oman Vision 2040, which targets reducing dependence on oil by achieving 15 percent of gross domestic product from non-oil sources by 2030 and 18 percent by 2040. 

“It will also contribute to achieving social justice by redistributing the wealth among the segments of society, provide support to the general budget of the country, and be directed in particular to finance part of the costs of the social protection system,” the authority said. 


Saudi Arabia’s non-oil industrial production up 5.3% in 2024: GASTAT

Updated 22 min 4 sec ago
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Saudi Arabia’s non-oil industrial production up 5.3% in 2024: GASTAT

  • Industrial Production Index declined 2.3%, driven by 5.2% contraction in oil-related activities
  • Mining and quarrying sector, which includes oil extraction, saw decline of 6.8%

RIYADH: Saudi Arabia’s non-oil industrial activities posted robust growth of 5.3 percent in 2024, highlighting the success of the Kingdom’s economic diversification efforts under Vision 2030.

The overall Industrial Production Index however declined by 2.3 percent, driven primarily by a 5.2 percent contraction in oil-related activities, according to the latest report from the General Authority for Statistics.

Saudi Arabia’s growing non-oil industrial output reflects progress in diversifying revenue and jobs beyond oil, a key Vision 2030 goal. 

Reforms such as easier licensing, tax incentives, and mega projects are driving growth in manufacturing, logistics, and technology. While oil remains volatile, the expansion is showing early success in the private sector, driven by growth in foreign direct investment.

During the Davos Conference in January, Saudi Minister of Economy and Planning Faisal Al-Ibrahim said that the non-oil economy is expected to grow by 4.8 percent this year.

The latest figures from GASTAT show that manufacturing played a pivotal role in driving growth in 2024, recording a 4.7 percent annual increase. Food production expanded by 6.2 percent, while the manufacture of chemicals and chemical products,, and coke and refined petroleum goods increased by 2.8 percent.

Manufacturing played a pivotal role in driving growth in 2024, recording a 4.7 percent annual increase. File/SPA

The mining and quarrying sector, which includes oil extraction, saw a decline of 6.8 percent in 2024. This drop offsets gains in other areas, pulling the overall IPI into negative territory for the year.

The report also revealed positive trends in utilities and infrastructure-related sectors. Electricity, gas, steam, and air conditioning supply activities grew by 3.5 percent, while water supply, sewerage, and waste management services increased by 1.6 percent. 

Saudi endeavors in non-oil exports

The Kingdom’s non-oil export sector has also seen impressive growth, reinforcing diversification efforts.

According to official  data released in April, Saudi Arabia’s non-oil exports reached SR515 billion ($137 billion) in 2024, a 13 percent increase from the previous year and a 113 percent rise since the launch of Vision 2030.

This expansion spanned all export sectors, with merchandise exports rising to SR217 billion, driven by petrochemical and non-petrochemical goods.

The Kingdom now exports to over 180 countries, with 37, including the UAE, France, and Indonesia, registering record imports, solidifying its role as a growing global trade hub.