Saudi Arabia invites investors to set up new airline

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The General Authority of Civil Aviation of Saudi Arabia (GACA) has issued an open invitation to investors from around the world interested in establishing a new low-cost airline at Dammam’s King Fahd International Airport (DMM).  

The process will consist of an open tender and investors will have until June 8, 2023, to submit their proposals. 

The city of Dammam is located in the east of the kingdom, on the shores of the Persian Gulf coast, close to Bahrain, and is a hub for the country’s oil industry. 

In the last few months Saudi Arabia has seen a raft of initiatives to dynamize and expand the kingdom’s role in the global aviation industry. These have included the launch of two new carriers: Riyadh Air, which will be an international hub-and-spoke carrier, as well as an airline to serve NEOM, a newly built city in the northwest of the country.  

This has been accompanied by large new aircraft orders for the incumbent airline Saudia, and the announcement of a US$100B infrastructure investment package expected to go in large part to upgrade the current airport network. 

In the official tender announcement, the Saudi authorities expressed an intention to further dynamize the competition in the Saudi air travel market by adding a new low-cost airline. The expectation is to get closer to the country’s leadership goal of reaching 330M air travellers in Saudi Arabia by 2030 and to connect Saudi airports directly with more 250 destinations worldwide. 

The carrier selected for this operation will be granted the freedom to fly from Dammam King Fahd International Airport to any other airport in Saudi Arabia, as well as international flights in accordance with the country’s international bilateral agreements. 

Although not mentioned in the announcement, at least one foreign low-cost carrier, Wizz Air, has recently expressed its interest in setting up a subsidiary in the Saudi kingdom, similar to Wizz Air Abu Dhabi, which it has already been running out of neighbouring Abu Dhabi (AUH) since 2019 together with a local partner. 

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