Other BriefingsSaudi Arabia’s PIF Eyes New Cargo Airline to Strengthen Logistics Hub Ambitions
In a strategic move to position Saudi Arabia as a global logistics powerhouse, the Public Investment Fund (PIF), the kingdom’s sovereign wealth fund, is reportedly exploring the creation of a new cargo airline. This initiative aligns with Saudi Arabia’s broader ambition to diversify its economy beyond oil, emphasizing growth in tourism, aviation, and logistics sectors.
According to sources cited by Bloomberg, PIF is currently in discussions with aerospace manufacturing giants Boeing and Airbus, as well as with aircraft lessors, to potentially acquire Boeing 777 and Airbus A350 freighters. These aircraft are intended to support the cargo operations of both the national flag carrier, Saudia, and the newly established Riyadh Air. However, the discussions are still in the early stages, and a final decision has yet to be made. There is also the possibility that PIF might delay or reconsider these plans.
The potential move, nevertheless, indicates Saudi Arabia’s commitment to enhancing its logistics infrastructure as part of the national transport and logistics strategy. This strategy aims to increase the logistics sector’s contribution to the kingdom’s annual non-oil revenues to approximately US$12 billion by 2030. Key to this initiative is Riyadh Air, the kingdom’s second national airline, which is set to commence operations in 2025, with plans to serve over 100 destinations worldwide by the decade’s end. Riyadh Air is expected to contribute US$20 billion to Saudi Arabia’s non-oil GDP and create more than 200,000 jobs, both directly and indirectly.
Meanwhile, Saudia, based in Jeddah, is undergoing a strategic shift to focus on religious pilgrimages, particularly Hajj and Umrah services. As part of this repositioning, Saudia will gradually reduce its presence at Riyadh’s airport, transferring its slots to Riyadh Air, a move that reflects the broader restructuring of the kingdom’s aviation sector.
The ambition to create a major logistics hub is also evident in Saudi Arabia’s plans to transform Riyadh Airport into a state-of-the-art aviation hub. The proposed King Salman International Airport will feature six parallel runways and is designed to accommodate up to 120 million passengers by 2030. By 2050, the airport is projected to handle 185 million travelers and process 3.5 million tonnes of cargo annually, while also generating 103,000 direct and indirect jobs.
This ambitious aviation and logistics strategy is a cornerstone of Saudi Arabia’s Vision 2030, a comprehensive plan aimed at diversifying the economy and reducing the kingdom’s dependence on oil. As PIF continues to explore new avenues for growth, the establishment of a cargo airline could play a crucial role in realizing these long-term objectives, further cementing Saudi Arabia’s position as a pivotal player in global logistics.
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