Saudi Arabia approves new low-cost airline targeting 10 million passengers by 2030

Saudi Arabia’s General Authority of Civil Aviation (GACA) has given the green light for a new national low-cost carrier (LCC) based in Dammam in Saudi’s Eastern Region.

The regulator issued an Air Operator Certificate (AOC) to the new carrier on Monday 14 September, after it completed required checks on safety, security and operational quality.

Air Arabia Alliance wins GACA competition

Air Arabia Alliance is the working name for the new budget carrier, announced in 2025 after GACA concluded a public competition to launch a new LCC.

According to GACA, the competition attracted bids from several LCCs. Air Arabia Alliance was credited with placing the most competitive offer. The new airline will operate domestic and international flights from King Fahd International Airport.

The Air Arabia consortium comprises Sharjah-based low-cost carrier, Air Arabia, along with Saudi investors Kun Investment Holding and Nesma Group.

“Through our value-driven business model, we aim to enhance air connectivity across the Kingdom, particularly in the Eastern Province,” said Adel Al Ali, Air Arabia Group CEO.

With Air Arabia operating an all-Airbus fleet, the new LCC is also expected to operate Airbus A320-family jets, with ambitions to have up to 45 aircraft, according to ch-aviation.

During a ceremony last year, when the Air Arabia Alliance was announced as the winner of GACA’s competition, Saleh Al-Jasser, Minister of Transport and Logistics Services and Chairman of GACA, said, “The Kingdom, under the support of its wise leadership, is witnessing unprecedented advancements in aviation and air transport projects, initiatives and services.”

How the new carrier is aligned with Saudi’s Vision 2030

Launching a new budget carrier in the Eastern Region is aligned with the Kingdom’s National Transport and Logistics Strategy as part of Vision 2030 to diversify revenues away from oil. The airline is expected to create over 2,400 direct jobs, while contributing to GDP growth targets under the Kingdom’s aviation programme and supporting tourism in Dammam and the Eastern Region.

GACA President Abdulaziz Al-Duailej previously said establishing a new airline is a major step toward achieving the Kingdom’s ambitious goal of serving 330 million passengers by the end of this decade.

Air Arabia Alliance’s ambitious network plans

Initially, the new airline will operate twice-daily flights from its home base in Dammam to Jeddah and Riyadh, while flights to Medinah will run daily.

Eng. Mohammed bin Ali Al-Hassany, Chief Executive Officer of Dammam Airports, welcomed the upcoming start of Air Arabia’s operations from King Fahd International Airport to domestic and international destinations, noting that the milestone reflects the airport’s growing position and the confidence of its partners in its operational capabilities.

He also commended the General Authority of Civil Aviation for its efforts in supporting the development of the partnership between Dammam Airports and Air Arabia.

Ultimately, the airline is targeting 24 domestic and 57 international destinations, connecting nearly 10 million passengers annually through Dammam’s main international gateway.

For travellers in the UAE, Dammam’s location enables wider connectivity across the Gulf’s aviation market.  

Can the Air Arabia Alliance LCC help meet Saudi Arabia’s ambitious Vision 2030 targets?

While Saudi Arabia is targeting over 300 million passengers annually by 2030, it has a long way to go. In 2025, the country served around 140 million passengers, meaning demand will need to grow by over 20% per year through 2030.

Given the current geopolitical risk, some of this year’s worst airspace disruptions have coincided with regional security tensions, putting the Middle East’s aviation ecosystem under severe strain.

The market is also stacking various new entrants. Alongside Riyadh Air, which officially launched commercial operations in October 2025, the Air Arabia-led Dammam LCC will compete against other local players, including Saudia, flynas and flyadeal, all of which are expanding capacity simultaneously. The new budget carrier will be the fourth LCC to enter Saudi’s market. Flyadeal and flynas are already two established carriers with SaudiGulf and Nesma both smaller players.

The new carrier’s dedicated home base at King Fahd International will, however, give it an operational advantage. Flynas and flyadeal serve multi-city networks including Riyadh, Jeddah, Madinah, and Dammam. The consortium also brings Air Arabia’s expertise as an established Gulf LCC into the mix