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

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.


Lucid beats estimates for EV deliveries as price cuts, cheaper financing spur demand

Updated 06 January 2025
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Lucid beats estimates for EV deliveries as price cuts, cheaper financing spur demand

  • Company handed over 3,099 vehicles in the fourth quarter ended Dec. 31
  • For 2024, production rose 7% to 9,029 vehicles, topping Lucid’s target of 9,000 vehicles

LONDON: Lucid Group beat expectations for quarterly deliveries on Monday, as the Saudi Arabia-backed maker of luxury electric vehicles lowered prices and offered cheaper financing to drive demand, sending its shares up more than 6 percent.
The company handed over 3,099 vehicles in the fourth quarter ended Dec. 31, compared with estimates of 2,637, according to six analysts polled by Visible Alpha. That represented growth of 11 percent over the third quarter and 78 percent higher than the fourth quarter a year earlier.
Production rose about 42 percent to 3,386 vehicles in the reported quarter from a year earlier, surpassing estimates of 2,904 units.


For 2024, production rose 7 percent to 9,029 vehicles, topping the company’s target of 9,000 vehicles. Annual deliveries grew 71 percent to 10,241 vehicles.
Lucid, backed by Saudi Arabia’s sovereign wealth fund, started taking orders for its Gravity SUV in November, in a bid to enter the lucrative SUV sector and take some market share from Rivian and Tesla.
Rivian on Friday topped analysts’ estimates for quarterly deliveries and said its production was no longer constrained by a component shortage. But Tesla reported its first fall in yearly deliveries, in part due to the company’s aging lineup.
Demand for EVs, already squeezed by competition from hybrid vehicles, could face another challenge as President-elect Donald Trump is expected to reverse many of the Biden administration’s EV-friendly policies and incentives.
The company also raised $1.75 billion in October through a stock sale that CEO Peter Rawlinson believes will provide Lucid with a “cash runway well into 2026.”
Lucid, whose stock was down about 28 percent in 2024, is scheduled to report its fourth-quarter results on Feb. 25.


Saudi Arabia’s PIF completes $7bn inaugural murabaha credit facility

Updated 06 January 2025
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Saudi Arabia’s PIF completes $7bn inaugural murabaha credit facility

  • Shariah-compliant financing is backed by a syndicate of 20 international and regional financial institutions
  • Facility builds on PIF’s recent success with sukuk issuances over the past two years

RIYADH: The Saudi Public Investment Fund has closed its first Murabaha credit facility, securing $7 billion in funding. This is a key step in the fund's plan to raise capital over the next several years. 

The Shariah-compliant financing is backed by a syndicate of 20 international and regional financial institutions, according to a press release. 

A murabaha credit facility is a financing structure compliant with Islamic principles, where the lender purchases an asset and sells it to the borrower at an agreed profit margin, allowing repayment in installments. This structure avoids interest, adhering to Shariah laws. 

“This inaugural murabaha credit facility demonstrates the flexibility and depth of PIF’s financing strategy and use of diversified funding sources, as we continue to drive transformative investments, globally and in Saudi Arabia,” said Fahad Al-Saif, PIF’s head of the Global Capital Finance Division and head of Investment Strategy and Economic Insights Division. 

 

 

The facility builds on PIF’s recent success with sukuk issuances over the past two years, further bolstering its financial strength and commitment to best practices in debt management. 

Rated Aa3 by Moody’s and A+ by Fitch, both with stable outlooks, PIF continues to solidify its position as a global financial powerhouse. 

The fund’s capital structure is supported by four main funding sources, including contributions from the Saudi government, asset transfers, retained investment earnings, and financing through loans and debt instruments. 

PIF’s strategy focuses on financing initiatives that contribute to economic growth in Saudi Arabia and internationally. 

The $7 billion murabaha credit facility is expected to bolster PIF’s liquidity, supporting its investments both locally and globally. 

By diversifying its funding sources through a Shariah-compliant structure, PIF looks to enhance its financial partnerships while complementing its existing financing tools, such as sukuk issuances. 

 

 

This aligns with its medium-term capital strategy, ensuring flexibility, competitive financing terms, and risk mitigation. 

Earlier in January, the National Debt Management Center also secured a Shariah-compliant revolving credit facility worth SR9.4 billion ($2.5 billion). 

The three-year facility, supported by three regional and international financial institutions, is designed to meet the Kingdom’s general budgetary requirements. 

Aligned with Saudi Arabia’s medium-term public debt strategy, the arrangement focuses on diversifying funding sources to meet financing needs at competitive terms. 

It also adheres to robust risk management frameworks and the Kingdom’s approved annual borrowing plan. 

PIF has been actively engaging in credit arrangements to support its investment initiatives and the Kingdom’s Vision 2030 economic diversification plan. 

In August 2024, PIF secured a $15 billion revolving credit facility for general corporate purposes, replacing a similar facility agreed upon in 2021. 

In addition to the revolving credit facility, PIF has diversified its financing instruments by issuing a $2 billion seven-year Islamic sukuk earlier in 2024 and planning to issue bonds in pounds sterling. 

These efforts are part of PIF’s strategy to leverage a variety of funding sources to support its expansive investment activities. 


Closing Bell: Saudi main market gains to close at 12,105 points

Updated 06 January 2025
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Closing Bell: Saudi main market gains to close at 12,105 points

  • MSCI Tadawul Index increased by 1.07 points, or 0.07%, to close at 1,510.91
  • Parallel market Nomu lost 190.29 points, or 0.61%, to close at 30,864.09

RIYADH: Saudi Arabia’s Tadawul All Share Index edged up on Monday, gaining 34.87 points, or 0.29 percent, to close at 12,104.69. 

The total trading turnover of the benchmark index was SR6.43 billion ($1.71 billion), as 137 of the listed stocks advanced, while 94 retreated.  

The MSCI Tadawul Index also increased by 1.07 points, or 0.07 percent, to close at 1,510.91. 

The Kingdom’s parallel market Nomu dropped, losing 190.29 points, or 0.61 percent, to close at 30,864.09. This comes as 36 of the listed stocks advanced, while 43 retreated. 

Al Majed Oud Co. was the best-performing stock of the day, with its share price surging by 5.62 percent to SR158. 

Other top performers included SAL Saudi Logistics Services Co., which saw its share price rise by 5.42 percent to SR276, and Riyadh Cables Group Co., which saw a 5.17 percent increase to SR158.80. 

Al Mawarid Manpower Co. and Astra Industrial Group also saw a positive change, with their share prices surging by 5.17 percent and 5.05 percent to SR114 and SR195.40, respectively. 

United International Holding Co. saw the steepest decline of the day, with its share price easing 2.45 percent to close at SR183.40. 

Zamil Industrial Investment Co. and Nayifat Finance Co. both recorded falls, with their shares slipping 2.43 percent and 2.43 percent to SR36.15 and SR14.44, respectively. 

National Co. for Learning and Education and Saudi Electricity Co. also faced losses in today’s session, with their share prices dipping 2.27 percent and 2.25 percent to SR197.80 and SR16.54, respectively. 

On the announcement front, the Saudi Exchange announced the listing and trading of shares for Almoosa Health Co. on the main market starting Jan. 7. 

During the first three days of trading, daily price fluctuation limits will be set at plus or minus 30 percent, while static price fluctuation limits will also apply. 

From the fourth trading day onward, the daily fluctuation limits will revert to plus or minus 10 percent, and the static limits will no longer be enforced. 

In a separate development, Almujtama Alraida Medical Co. announced the signing of a credit facility agreement with Alinma Bank worth SR45 million. 

Alinma Bank saw a 0.17 percent decrease in its share price on Monday to settle at SR29.90.

The financing package includes an SR35 million revolving facility aimed at purchasing goods and an SR10 million revolving facility for capital expenditures. 

The credit facilities have a duration of three years and are secured by a promissory note. The objective of the financing is to support working capital requirements and fund capital expenditures, the company stated. 

Meanwhile, Mufeed Co. revealed the awarding of an SR41.5 million project focused on the development of concept, content, and execution of events aimed at reviving the Kingdom’s cultural and historical heritage. 

The contract, which is set to be signed on Jan. 20, will involve a legal entity as the counterparty. 

The project entails organizing unique activities designed to showcase and enhance the Kingdom’s rich historical and cultural narratives. 

Mufeed Co. saw a 2.93 percent increase in its share price by the close of Monday’s trading session to reach SR73.80. 


Saudi Arabia’s expat remittances up 19% to $3.21bn: SAMA

Updated 06 January 2025
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Saudi Arabia’s expat remittances up 19% to $3.21bn: SAMA

  • Remittances sent abroad by Saudi nationals totaled SR6.17 billion, reflecting a 22.71% increase
  • Kingdom ranks among the most affordable countries for remittance transfers, according to the World Bank

RIYADH: Expatriate remittances from Saudi Arabia rose to SR12.03 billion ($3.21 billion) in November, marking an 18.73 percent increase compared to the same month of 2023, new data showed. 

Figures from the Kingdom’s central bank, also known as SAMA, indicated that remittances sent abroad by Saudi nationals totaled SR6.17 billion, reflecting a 22.71 percent increase during this period. 

Saudi Arabia’s rising remittance flows underscore its growing prominence as a global economic hub and a premier destination for expatriate workers. 

According to the latest Saudi government census released in May 2023, expatriates comprise 41.6 percent of the Kingdom’s population. Among the largest expatriate communities are 2.12 million Bangladeshi nationals, followed by 1.88 million Indians and 1.81 million Pakistanis. 

These sizable populations highlight the scale of remittance transfers from the Kingdom, driven by competitive salaries, tax-free income, and comprehensive employee benefits. 

This dynamic has positioned Saudi Arabia as a major contributor to remittance-dependent economies, supporting millions of families in South Asia, the Middle East, and Africa. 

The Kingdom ranked second in the 2024 InterNations Working Abroad Index, reflecting its appeal to professionals across sectors such as finance, health care, and technology. 

The Vision 2030 initiative, aimed at diversifying the economy and boosting investment, has spurred unprecedented growth in job opportunities, particularly as new industries emerge and existing sectors expand. 

Expatriates in Saudi Arabia often benefit from attractive compensation packages that include housing allowances, health insurance, children’s education funding, and annual flights home. 

With limited personal living expenses and no income tax, expatriates enjoy significant disposable income, enabling them to remit substantial amounts to their home countries. 

According to World Bank data, the Kingdom ranks among the most affordable countries for remittance transfers, thanks to competitive fees and streamlined processes. 

Digitalization is reshaping how remittances are managed, further enhancing efficiency and accessibility. Saudi Arabia’s fintech landscape, buoyed by the Vision 2030 Financial Sector Development Program, has introduced a range of innovations. 

Mobile banking apps, online payment gateways, and partnerships with global remittance platforms have simplified transactions. Services such as the Saudi Payments Network, or Mada, and the adoption of blockchain technology by local banks have improved transfer security and speed. 

Additionally, increased competition in financial services has driven down costs, making transfers more affordable compared to global standards. 

The growing reliance on digital channels aligns with the Kingdom’s broader push toward a cashless economy. Remittance platforms integrated with mobile wallets and QR-based payments have democratized financial access, especially for lower-income workers. 

As Saudi Arabia continues to implement Vision 2030’s transformative agenda, remittance flows are expected to remain robust. 

The Kingdom’s focus on diversifying its economy, creating a business-friendly environment, and investing in technology will likely attract even more expatriates. 

With stronger remittance infrastructure and growing digital adoption, the ease, affordability, and volume of transfers will further enhance the global economic impact of expatriate labor in Saudi Arabia. 


Saudi Arabia’s e-commerce sector sees 10% growth, official figures reveal

Updated 06 January 2025
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Saudi Arabia’s e-commerce sector sees 10% growth, official figures reveal

  • Logistics sector recorded 82% surge in the issuance of records in the fourth quarter of 2024
  • Fintech solutions sector recorded 12% year-on-year increase with the issuance of 3,152 records

RIYADH: Saudi Arabia’s e-commerce sector saw its upward momentum continue in the fourth quarter of 2024, with 40,953 businesses now registered across the Kingdom— a 10 percent increase year on year.

The latest data from the Ministry of Commerce revealed that Riyadh led with 16,834 registrations, followed by Makkah with 10,314, and Eastern Province with 6,488. In the Madinah and Qassim regions, e-commerce enrollments reached 1,952 and 1,324, respectively. 

The growth falls in line with Saudi Arabia’s ongoing transition toward a diversified, digitally-driven economy, with e-commerce playing a crucial role. The Kingdom now ranks among the top 10 countries globally in expansion of this sector.

These figures align with the nation’s goal to increase modern commerce and e-commerce’s share of the retail sector to 80 percent by 2030, as well as the government’s aspiration to raise online payments to 70 percent by the same year.

The Ministry of Commerce’s latest quarterly report further revealed that the logistics sector recorded an 82 percent surge in the issuance of records in the fourth quarter compared to the same period of 2023 to reach 16,561 registrations.

The capital led the list with 8,074 registrations, followed by Makkah with 4,235 and Eastern Province with 2,038. The Madinah and Qassim regions recorded 486 enrollments each.

Regarding application development, the report showed that the sector witnessed a 36 percent year-on-year jump in the issuance of records to reach 15,775 registrations in the final quarter of 2024, compared to the corresponding quarter of 2023.

Riyadh topped the list with 9,647 registrations, followed by Makkah with 3,191 and the Eastern Province with 1,590.

The Kingdom’s fintech solutions sector also recorded a 12 percent year-on-year increase with the issuance of 3,152 records in the fourth quarter of 2024, compared to the same period a year earlier.

The bulletin also underscored significant growth across various promising sectors, aligning with Saudi Arabia’s Vision 2030 goals. 

Notable expansions were observed in several key fields, including cloud computing services, manufacturing solar panels and their parts, and real estate activities.

Growth was also seen in organizing tourist trips, entertainment events, conferences, and trade fairs.

These developments reflect the Kingdom’s strategic focus on fostering innovation and sustainable growth across diverse industries.  

The ministry’s quarterly business sector bulletin provides an overview of the latest developments in the nation’s commercial environment, highlighting Saudi Arabia’s economy’s continued growth and diversification.