Key Points:
- Saudi Arabia’s PIF is in early discussions to acquire Boeing 777 and Airbus A350 freighters for a new cargo airline.
- The move aligns with Saudi Arabia’s Vision 2030, which aims to diversify its economy and focus on logistics, tourism, and aviation.
- The new airline would support Saudia and Riyadh Air, challenging regional players like Emirates and Qatar Airways.
- Global air cargo demand is rising, with June shipments up 14%, potentially exceeding 2021’s record levels.
Saudi Arabia’s Public Investment Fund (PIF) is in preliminary discussions to establish a new cargo airline to transform the kingdom into a major global logistics hub rivaling Dubai and Doha. According to sources familiar with the matter, the potential airline would support the national carrier, Saudia, and the newly launched Riyadh Air.
The PIF is exploring options to acquire Boeing 777 and Airbus A350 freighters for the new venture. These discussions involve plane makers and aircraft lessors, although no final decisions have been made. The talks are still in the early stages, and the PIF may decide to delay or even abandon the project.
Riyadh Air and the PIF declined to comment on the ongoing discussions, while Saudia did not respond to requests for comment. Boeing and Airbus also refrained from commenting, citing policies against discussing negotiations with potential customers.
Saudi Arabia is keen to leverage its strategic location, connecting Europe, Asia, and Africa, to capitalize on the booming demand for air cargo. According to the International Air Transport Association, air cargo shipments increased 14% in June compared to the previous year, marking the seventh consecutive month of double-digit growth. This surge is expected to surpass the record levels reached in 2021.
This initiative is part of Saudi Arabia’s Vision 2030, which aims to diversify its economy from oil dependency by focusing on tourism, aviation, and logistics sectors. The kingdom has already made significant investments in aviation, including the launch of an aircraft leasing company and a helicopter firm, as well as in Saudia’s engineering unit. Additionally, there are plans to develop one of Riyadh’s world’s largest airports.
Established by the PIF, Riyadh Air aims to build a global network and compete with regional giants like Emirates and Qatar Airways. Emirates currently operates 14 freighters and plans to expand its fleet, while Qatar Airways has 28 cargo jets.
Jeddah-based Saudia is being repositioned to concentrate on religious pilgrimage services, with its cargo operations likely to be integrated into the new airline venture.
