Saudi Arabia examines possibility of founding a new cargo airline
August 29, 2024
Bloomberg has reported that the Saudi Arabian Public Investment Fund (PIF) is looking at the possibility of founding a new cargo airline, and is in preliminary talks with both Airbus and Boeing to discuss potential orders for aircraft for the new venture. The new cargo airline would provide services to existing national carrier Saudia and Riyadh Air, both of which are already owned by the PIF sovereign wealth fund. It is unclear as to whether the new entity would augment or replace Saudia’s existing cargo arm, which currently operates four Saudia-owned Boeing 777Fs, and four Boeing 747-400Fs wet-leased from Air Atlanta Europe/Icelandic.
It has been suggested that Saudia is being repositioned to concentrate on serving religious pilgrimages and that its cargo operations would therefore simply be transferred over to the new entity.
Interest is believed to centre on the Airbus A350F and the Boeing 777-8F, but numbers are unclear. Regional rivals Emirates and Qatar Airways have 15 and 28 freighters in service, respectively, with five and 34 more 777 freighters on order.
Under the Kingdom’s Vision 2030 programme, Saudi Arabia hopes to diversify its economy away from dependency on oil and gas, and is aiming to invest up to US$100 billion in a broad range of aviation, tourism and transport projects. These will include new airlines (like Riyadh Air), new airport infrastructure, an aircraft leasing company, and advanced air mobility networks.
The Public Investment Fund (PIF) hopes to position the Kingdom as a major hub or node in the global logistics market, competing in the Gulf region with Dubai International and Doha Hamad International. The Middle East sits in a strategic location between Europe, Asia, and Africa, and is well placed to exploit the surging demand for air cargo services.
