AS IT HAPPENED: Future Investment Initiative – Day Three

AS IT HAPPENED: Future Investment Initiative – Day Three
The Riyadh event gathered more than 6,000 participants for discussions on topics ranging from geoeconomics to gaming. (AFP)
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Updated 27 October 2022

AS IT HAPPENED: Future Investment Initiative – Day Three

AS IT HAPPENED: Future Investment Initiative – Day Three
  • The Public Investment Fund will establish regional investment companies in Jordan, Bahrain, Sudan, Iraq and Oman

DUBAI: The Future Investment Initiative (FII) in Riyadh drew to a close on Thursday packed with sessions for the more than 6,000 attendees in the annual event.

Plenary sessions including: “Transforming Banking and Investment for the Resilient Economy;” “Investing For Global Impact”; “VC: Economic Rocket Launchers”; “China Is Back”; and “Modernizing Mining” were lined with speakers from leading decisionmakers, policymakers and investors, among others.

Wednesday’s highlights included Crown Prince Mohammed bin Salman’s announcement that the Public Investment Fund would establish regional investment companies in Jordan, Bahrain, Sudan, Iraq and Oman.

Oil giant Aramco also announced the launch a $1.5 billion sustainability fund to invest in stable and inclusive energy transition technology, while ACWA Power chairman Mohammed Abunayyan said Saudi Arabia was set to become the world’s biggest green energy producer.

An aviation expert meanwhile told Arab News that the Kingdom’s travel industry will witness significant growth and is projected to reach $100 billion by 2032.

On the economic front, Saudi Arabia’s finance minister Mohammed Al-Jadaan said that the world was going to witness a very difficult six months from now as economic challenges such as high-interest rates and inflation persist in almost all countries.

As it happened: The following are live updates on the highlights of the final day at FII 6th edition. (All timings are GMT)

17:00 - With more than 6,000 of the world’s business leaders, policymakers, investors, entrepreneurs and tech experts, the 6th edition of the Future Investment Initiative proclaiming Saudi Arabia’s investment might and transforming business environment concluded in Riyadh on Thursday

Thank you for joining us for the week, be sure to join us again for the next instalment of FII!

16:15 - The surge in foreign investment in Saudi Arabia is a welcome sight, according to Nicolas Dufourcq, CEO of the French public investment bank Bpifrance.

Talking to Arab News on the sidelines of the Future Investment Initiative forum in Riyadh, DuFourq said: “I was very happy to see here for the first time, fresh entrepreneurs coming to Saudi Arabia to invest in Saudi Arabia, and not only to get funds for their ventures in Europe."

15:30 - In an interview with Arab News on the sidelines of the Future Investment Initiative forum in Riyadh, Yasser Abuatek — head of Umm Al Qura For Development and Construction — said ‘Masar Destination’ is already 88 percent complete in terms of infrastructure, adding it was set to have 24,000 hotel rooms completed by the end of 2023.

14:20 - Environmental, social and governance policies have become politicized as a certain section of the community view it with a woke bias against financial companies, a senior official of a leading US-based global litigation firm has claimed.

13:40 - General Electric will test green-hydrogen-powered gas turbines in Egypt at the 27th UN Climate Change Conference in November, revealed the company’s president and CEO.

12:11 - Saudi Arabia’s Export-Import Bank is set to open two offices in Africa in 2023, as it plans exports worth SR1.5 billion ($400 million) through these centers.

0952: Public Investment Fund-owned real estate company ROSHN is looking to triple its building rate as it seeks to become the biggest residential developer in the Gulf Cooperation Council region by 2025, according to its CEO David Grover.

0937: Saudi Arabia’s tourism sector is on course to contribute 10 percent of the Kingdom’s gross domestic product within a decade, according to Gloria Guevara, chief special advisor to the Minister of Tourism.

0922: The Public Investment Fund has launched a Local Content Growth Program aiming at growing competition and innovation in the private sector.

Saleh Romeih, managing partner and head of operations for EMEA of SoftBank Vision Fund: “Innovation comes from many different parts of the world today. It used to be the Valley, Berlin, London. But today innovation comes from all over the place, what I call the capillaries of the world. India for example, that is a huge area. Here in the Kingdom itself, we have some investments in common… the good news is that is innovation coming from the pockets of the world and I think it is important for us investors to be present in these capillaries to pick up on these innovations. I think the other lesson we have learned is that… we coexisted for many years in a system of globalization where there was interdependence between different regions. That today I think is gonna get challenged given where geopolitics is headed.”

“We have a new paradigm where money is not free anymore. Since 2008 we enjoyed zero interest rates for very long, effectively it means capital was free… I think many investors lost a bit of discipline in employing that capital and the companies themselves did not have to work that hard.”

Christine Tsai, CEO of 500 Global: “We have seen a very significant shift in the center of gravity [in the MENA region]. Our first investment into a Saudi company was 2016, and over the years we have been investing further into the Kingdom… while continue to invest throughout the region, we see much potential with Saudi Arabia, we worked closely with partners like Sanabil who’s been instrumental in developing the startup ecosystem here. In terms of the potential, we to-date have invested in over 60 Saudi companies and we only see it growing further, especially because of the deal flow that we see at the early stages. There has been tremendous support from the Kingdom itself to spur this entrepreneurship at all levels. What we have seen both here as well as in our work in emerging markets and mature markets around the world is that to build a very sustainable venture ecosystem it takes multiple parties.”

“In terms of our global approach, we see our efforts in the Kingdom and broadly in the MENA region, only increasing and we only hope to see more and more unicorns. We do see big outcomes happening here.”

Dr. Hani Enaya, CIO of Sanabil Investments: “If you look at the year that followed the global financial crisis, it produced one of the best ventures in the VC market, and as a matter of fact of what’s happening on these markets today is very healthy decalibration. And if you look at the data, the first two quarters of this year, the funds raised are similar amount almost to what they raised a year ago. Something interesting is happening, so the dollar amount is healthy but actually much fewer funds raised that money, so there is much more consolidation happening.”

Prince Khaled Bin Al-Waleed Bin Talal Al-Saud, founder and CEO of KBW Ventures: “Venture is absolutely not going anywhere. Venture is the stepping stone of everything innovation… we have seen a number of increased amounts of innovation happening in the past years, and in the next years to come. As a matter of fact there is more dry powder or more capital on the sidelines from venture funds than ever before seen and I think now is the time and the next few months to actually capitalize, save up a lot of capital to really invest in the next economic downtrend that we are having. And the best time to invest really is after an economic downturn.”

“Venture is the foundation of everything that is going to evolve from there when it comes to growth capital or when it comes to going IPO and the natural rounds of investing. For me there is more money being invested in the venture world… there is more money being invested in venture in the first three quarters of this year than the entire last year. Venture is definitely still there.”

0741: Plenary on VC: Economic Rocket Launchers with Prince Khaled Bin Al-Waleed Bin Talal Al-Saud, founder and CEO of KBW Ventures; Dr. Hani Enaya, CIO of Sanabil Investments; Dr. Klaus Hommels, founder and CEO of Lakestar; Saleh Romeih, managing partner and head of operations for EMEA of SoftBank Vision Fund; GV Ravishankar, managing director at Sequoia Capital India & SEA and Christine Tsai, CEO of 500 Global.

Dr. Rodrigo Tavares, founder and CEO of Granito Group: “Impact investing is about investing in companies whose products and services generate positive social environmental impact, and that impact needs to be measured.”

“There is no good investments without integrating ESG. It is irresponsible, it is unsophisticated, it is unprofessional. ESG is a set-up of characteristics emanating from the financial assts that investors need to incorporate into their traditional investment making to allocate resources. Not doing that would be a violation of the fiduciary duties. ESG is not necessary about saving the planet, doing good, it is mostly about impact investing.”

Brian Hook, vice chairman for global investments at Cerberus, on the Abraham Accords: “What we are seeing here [in the region] is nothing short of an economic, cultural and social transformation. In Saudi Arabia, and in the Gulf broadly, I think this is one of the most economically dynamic regions of the world today and that is going to continue. You see increased people-to-people ties, greater privatization in a number of Gulf economies. The Abraham Accords has unlocked investment opportunities that we have been hoping for I think some time. In 2021, you had $2 billion in trade between Abraham Accords countries. In UAE and Israel it is a 163% increase in trade since August two years ago… the economic benefits have been significant, that is going to continue. For companies and firms that want to make an impact… think this is the region where you will make the biggest impact, where there is the greatest opportunity. The leadership in the Gulf is transformative.”

Jacques-Phillipe Piverger, CEO of Goodlight Capital: “[With respect to impact investing], there is a high correlation between purpose and high returns in investments and in terms of mitigating risk. If you look at the last couple of years where there was significant dislocations relating to the economy, if you are simply investing in companies that are bottomline driven and are not solving for things that are of consequence, they’re gonna be more exposed to risks and challenges.”

“Investors should start really start to think of impact, has something that correlates highly with performance as opposed to something that might be concessionary.”

0700: Plenary on Investing For Global Impact with Brian Hook, vice chairman for global investments at Cerberus; Jenny Lee, managing partner at GGV Capital; Jacques-Phillipe Piverger, CEO of Goodlight Capital and Dr. Rodrigo Tavares, CEO and founder of Granito Group.

Samer Haj-Yehia, chairman of Bank Leumi: “The fintech industry is on the rise, the economy is healthy unlike other economies around the world… the prospects for the future are very good. If you look at the regulations which are fundamental for the banking sector in particular, the regulators are giving the tailwind to support the change.”

Charles Schaf, CEO of Wells Fargo: “This time of disruption in financial services, that is the new normal and we’re far from done in all of this. If we think back to what happened in the past 10-15 years, aside from the economic disruption, and you think about the rise of blockchain, crypto, direct lending, all of the technology companies entering financial services, the fintech community themselves… the landscape, it is not clear who the winners and losers are. If we think what the future looks like, this battle is just beginning, and will be a great battle between established financial institutions, the government in some parts of the world as they figure out the role the want to play, the fintech community… and the technology players.”

Saad Bin Abdulaziz Al-Khalb, CEO of Saudi Exim Bank: “The main mandate of eximbanks and ECAs [export credit agencies] is to provide facilities to development financial institutions owned by government to support global trades and export activities. The main mandate is to support [the] economy and flow of goods, trades, and infrastructure and long-term projects. So if there is any downturn in economy, pandemic, geopolitical tension, climate change or a significant hike of rates that we are seeing on a very short period of time, this is where ECAs, eximbanks have to step in and support flow of trade and cross-border transactions. We were started in February 2020, exactly in the pandemic year and since then we have approved about SR20 billion to support Saudi exporters.”

“It is part of the core headline of Saudi Vision 2030, to make Saudi Arabia a central logistic hub to support the world. All the other strategies has to be made so we have the roadmap for the future, we know what we are gonna do and the logistic strategy, the expected investment is SR40 billion in the next three years that will require financing from financial institutions and ECAs locally and globally.”

Samer Haj-Yehia, chairman of Bank Leumi: “I think the entire banking system is going through significant evolution. When you analyze the banking sector, you at look at two evolutions; one is the technology and one is the business. What you see now is the vast majority of the fintech and innovation are actually happening in the emerging markets in general and in the Middle East in particular. And that is the green field and blue ocean for investment.”

“If you look at for example Africa you have the high-tech startups tripled to 5,200 between 2021, and half of that is from fintech. The economy here is thriving and you have significant programs for 2030 well under execution. The GDP is growing, it’s 12.2 percent here in Saudi [Arabia] which is one of the highest in the world, with low inflation at 3.1 percent so there is a lot to do here from a GDP perspective which is coupled with the banking industry.”

“That together, when you look at the population that is growing, with a high percentage of youth that is tech savvy, you have a high penetration of mobile, and there are a number of places that are underbanked. So potential here is huge.”

Francois Wat, partner at Rothschild & Company: “We are seeing some dramatic changes in our industry, the volume of online and digital banking has increased by more than 50% pre COVID-19 and post COVID-19. So by definition the activity is moving online very quickly. It is interesting for us to see competition… the number of players in the system has increased dramatically and it would be interesting to see how that will consolidate... I would expect traditional banks and the big banks to benefit from these trends by maybe trying to consolidate some of the market to incorporate a lot of these financial innovations within their own products.”

Dame Susan Rice, chairwoman of GEFI Global Steering Group: “The resilience of [UK banks], the testing of difficult scenarios sometimes out to 100 years, I mean extraordinarily challenging requirements for a bank and the institutions are kept to these so I feel and I know… that the system is really quite strong. But however strong it is that does not mean something might come along or several things come along, we often think in linear ways… I think the resilience is there and the desire to be resilient because no one wants to go through what happened in the financial crisis.”

“When the economy becomes very difficult and challenging probably the most important thing for them (clients) and for our institutions and I would sum it up in one word is the word trust. If we can demonstrate that we understand that the pressures and the issues of the customer and they continue to trust us that is really good. If they don’t, they will turn to others who are less regulated or less experienced or less well-financed and they will get into trouble, both businesses and people, so it’s important that we keep our customers with us as institutions. That is an important factor.”

“[On] crypto and digital banking, we are never going back to running to a branch to get some money, we are well past that. But if you think of the history of money, it starts with exchanges in kind… and went into paper and then into plastic. In a way crypto is another iteration there and then again it is a matter of trust that we have ways to protect customers from anything untoward that might happen to them.”

Tong Li, CEO and executive president at BOC International Holdings Limited: “With the increasing popularity of mobile internet technology and the rapid growth of financial media industry, more and more individual investors have been tapping into capital market with a lower transaction cost and higher information availability through wireless online platforms. I see this trend as inevitable. I tend to view the impact of this trend, the long run would be positive, it will boost the market transparency… this in the long run will benefit the economic growth.”

Charles Schaf, CEO of Wells Fargo: “We still see extraordinary strength across our consumer businesses and our corporate businesses of all sizes. We see a little bit of stress in those with less affluence and those in industries that are particularly inflation affected, but it is really a very, very small piece of the overall customer base. What we are all concerned about and what we think is inevitable is very, very different than what we are seeing.”

“Our hope is that the measured impact that people will be able to work through because the known direction of travel will help to ease the strain that they will see. It’s possible that the significant changes the cumulative impact of that can have a much bigger impact, as well as the course of geopolitical events which could certainly change everything, but we just have to separate what we see in the markets versus what we see in the real economy. And today appropriately incredibly nervous but the real economy is still particularly strong.”

Charles Schaf, on the American banking system: “The [US financial] institutions are so much stronger today than they were pre-financial crisis. And it not just capital levels, we all talk about capital levels going from 6%, 7%, 8% to 10%, 11%, 12%, 13% and for some institutions still heading higher which we are able to achieve and still continue to support the marketplace… the banks per se are still in really great shape.”

Saad Bin Abdulaziz Al-Khalb, CEO of Saudi Exim Bank: “Eximbanks are an integral part of financial systems, where they are strategic partners of commercial financial institutions supporting their credit offering ang mitigating financial risks and cross-border and long-term transactions.”

“Our main objective is to ensure that no Saudi export cross-border transaction fails due to lack of insurance or financing.”

0612: Plenary on Transforming Banking And Investment For The Resilient Economy with Saad Bin Abdulaziz Al-Khalb, CEO of Saudi Exim Bank; Charles Schaf, CEO of Wells Fargo; Tong Li, CEO and executive president at BOC International Holdings Limited; Frederic Oudea, CEO at Société Générale; Dr. Samer Haj-Yehia, chairman of Bank Leumi; Francois Wat, partner at Rothschild & Company and Dame Susan Rice, chairwoman of GEFI Global Steering Group.


China to implement zero tariffs on coal imports to the end 2023

China to implement zero tariffs on coal imports to the end 2023
Updated 24 March 2023

China to implement zero tariffs on coal imports to the end 2023

China to implement zero tariffs on coal imports to the end 2023

BEIJING: China will extend some preferential tax policies and continue to implement zero tariffs on coal imports until the end of this year, state media CCTV reported on Friday, citing a cabinet meeting chaired by Premier Li Qiang on the same day, according to Reuters.

China cut tariffs on coal to zero in April last year in the face of concerns over domestic energy security and supply disruptions.

The country’s coal imports in the first two months of this year surged 71 percent from the same period last year, as utilities stepped up purchases of cheap thermal coal from Indonesia while arrivals from Mongolia also picked up after the easing of COVID-19 restrictions.

China will also cut some taxes for small companies and individual businesses and extend such favorable policy until the end of 2024, state media reported.

Other preferential tax policies include a reduction in tax related to research and development and a halving of logistics companies’ tax on warehouse land for bulk commodity storage in urban areas.

The cuts are expected to reduce the total burden by more than 480 billion yuan ($69.80 billion) a year, CCTV said.

Last year, when private businesses were hit hard by stringent COVID-19 lockdowns and curbs, China’s tax and fee cuts, tax refunds and deferred payments totalled 4.2 trillion yuan, the finance ministry said. That included 2.4 trillion yuan in VAT tax rebates, the largest in recent years.


World shares fall on banking turmoil, recession worries

World shares fall on banking turmoil, recession worries
Updated 24 March 2023

World shares fall on banking turmoil, recession worries

World shares fall on banking turmoil, recession worries

BANGKOK: Shares fell Friday in Europe and Asia as worries flared over turmoil in the banking sector and potentially worsening risks of recession, according to the Associated Press.

European benchmarks sank as shares in Deutsche Bank plunged more than 10 percent. Reports said its shares fell because the company was facing higher costs for insuring itself against default. US futures turned lower and oil prices fell more than $2.

Investors are worried that more banks might suffer a debilitating exodus of customers following the second and third-largest US bank failures in history. That turmoil is clouding the outlook for what the Federal Reserve will do with interest rates after hiking them to market-rattling heights over the last year.

The fear is that all the turmoil in the banking industry could cause a sharp pullback in lending to small and midsized businesses around the country. That could put more pressure on the economy, raising the risk for a recession that many economists already saw as likely.

Germany’s DAX lost 2.5 percent to 14,834.24 and the CAC 40 in Paris tumbled 2.5 percent to 6,965.01. Britain’s FTSE 100 declined 2.1 percent to 7,245.65. The future for the S&P 500 was 0.9 percent lower while that for the Dow industrials lost 1.1 percent.

Deutsche Bank’s shares plunged 14 percent after an overnight surge in credit default swaps — a hedge against defaults for bond investors. Other European banks also lost ground. Commerzbank dropped 8.7 percent,

Societe General skidded 7.7 percent and Credit Suisse, itself subject to a government-arranged buyout by UBS, dropped 8.6 percent. UBS gave up 8 percent.

Regional banks’ shares in Asia were modestly lower Friday, with HSBC Holdings plc losing 2.9 percent in Hong Kong while mid-sized Japanese bank Resona Holdings declined 2.6 percent.

Shares in Japanese energy and electronics company Toshiba Corp. gained 4.2 percent after it announced late Thursday that it had accepted a $15 billion tender offer from a buyout fund made up of the nation’s major banks and companies. If regulators approve it, the proposed buyout by private equity firm Japan Industrial Partners would be a major step in troubled Toshiba’s yearslong turnaround effort, allowing it to go private.

Japan reported that its inflation rate fell to 3.3 percent in February from 4.3 percent the month before, though core inflation excluding fresh food and energy costs rose to 3.5 percent from 3.2 percent. The data suggest persisting pressure on the Bank of Japan to adjust its below zero interest rate policy, though economists said they expect price pressures to abate in coming months.

“Given the recent market turmoil surrounding the banking sector,” ING economists said, “the BOJ’s move will likely be well communicated with the market before it substantially changes its policy.”

Tokyo’s Nikkei 225 index lost 0.1 percent to 27,385.25 and the Kospi in Seoul gave up 0.4 percent to 2,414.96. Hong Kong’s Hang Seng slipped 0.7 percent to 19,915.68 and the Shanghai Composite index sank 0.6 percent to 3,265.65.

Australia’s S&P/ASX 200 shed 0.2 percent to 6,955.20. Shares fell in Mumbai but rose in Bangkok and Taiwan.

On Thursday, the S&P 500 added 0.3 percent for its third gain in four days while the Dow Jones Industrial Average gained 0.2 percent. The Nasdaq composite held up better thanks to strength in technology shares, gaining 1 percent.

Stocks fell sharply the day before after the Federal Reserve indicated that while the end may be near for its hikes to interest rates, it still doesn’t expect to cut rates this year. Fed Chair Jerome Powell also insisted the Fed could keep raising rates if inflation stays high.

Stocks in the financial industry ended up being the heaviest weight on the S&P 500 despite rising in the morning. First Republic Bank fell 6 percent after giving up a gain of nearly 10 percent.

In other trading Friday, US benchmark crude oil dropped $3.09 to $66.87 per barrel in electronic trading on the New York Mercantile Exchange. It gave up 94 cents to $69.96 per barrel.

Brent crude, the pricing basis for international oil, lost $3.08 to $72.42 per barrel.

The US dollar fell to 130.09 yen from 130.83 yen. The euro slipped to $1.0743 from $1.0833.

Apico secures $29m funding for new plastics factory in Riyadh

Apico secures $29m funding for new plastics factory in Riyadh
Updated 24 March 2023

Apico secures $29m funding for new plastics factory in Riyadh

Apico secures $29m funding for new plastics factory in Riyadh

RIYADH: A new plastics factory in Riyadh is a step closer after the Arabian Plastic Industrial Co. secured SR105.5 million ($29 million) of funding from the Saudi Investment Bank.

According to a filing to the Kingdom’s stock market, Apico will use the funds – which come in the form of working capital and a medium term loan – to build the facility as part of a plan to expand production.

The Jeddah-based company had signed a land lease contract with the Saudi Authority for Industrial Cities and Technology Zones – known as Modon – in 2022 with regards to the factory.

Of the SR105.5 million, SR55.5 million will be spent on the expansion with the remainder earmarked for existing facilities.

Apico made its debut on the Kingdom’s stock market in October 2022, when its shares climbed 18.52 percent above its listing price on the first day of trading.

The company offered 1 million shares, or 20 percent, of its SR50 million market capitalization.

The offering coverage was 15.43 times oversubscribed, with the offer price set at SR27 per share.

Established in 1996, Apico serves customers across different sectors, including to Almarai Co., flynas, TotalEnergies, and Nahdi Medical Co..

Moody’s boosts ratings for six key Saudi companies, including PIF and Aramco

Moody’s boosts ratings for six key Saudi companies, including PIF and Aramco
Updated 24 March 2023

Moody’s boosts ratings for six key Saudi companies, including PIF and Aramco

Moody’s boosts ratings for six key Saudi companies, including PIF and Aramco

RIYADH: Saudi Arabia’s Public Investment Fund and energy giant Aramco are among six firms in the Kingdom to have their ratings boosted from stable to positive by Moody's Investors Service.

The credit rating agency said the upgrade in outlook is linked to the strength of Saudi Arabia’s economy, which was also changed to positive from stable earlier this month.

Saudi Basic Industries Corporation, also known as SABIC, Saudi Telecom Co., known as stc, and the Saudi Power Procurement Co. were among the other companies to see their grading increase.

The Saudi Electricity Co. also received a boost.

In a report explaining its rationale for the shift, the ratings agency said: “(These) rating actions are a direct consequence of the sovereign rating action and reflect the credit linkages between the Government of Saudi Arabia and each of the six entities. 

“While these corporates benefit to varying degrees from international assets and cash flows, they all have significant credit linkages to the Saudi Arabia sovereign and are exposed to the domestic environment including political, economic, regulatory and social factors.”

Reflecting on Aramco, the report said the company’s A1 rating “reflects its very large operational scale, significant downstream integration and strong financial flexibility given its low cost structure and low leverage relative to cash flows.”

It added: “These characteristics provide resilience through oil price cycles and also help mitigate carbon transition risk, which is a material credit consideration for oil and gas companies.”

Moody’s said that SABIC had been able to maintain its strong global position in the petrochemical and fertilizer market thanks to “competitively priced domestic feedstock under long-term contracts with Saudi Aramco.”

The report added: “These advantages help mitigate to an extent the volatility of its predominantly commodity-based petrochemical, fertilizer and steel activities and SABIC's asset concentration in Saudi Arabia.”

In a section on the PIF, Moody’s said the organization had a “high-quality investment portfolio”, a “very strong financial profile with very low leverage and very high interest coverage”, and an “excellent liquidity profile”.

NEOM Airlines set for take-off by end of 2024, CEO reveals

NEOM Airlines set for take-off by end of 2024, CEO reveals
Updated 24 March 2023

NEOM Airlines set for take-off by end of 2024, CEO reveals

NEOM Airlines set for take-off by end of 2024, CEO reveals

RIYADH: A dedicated airline for Saudi Arabia’s futuristic city NEOM will take to the skies by the end of 2024, the carrier’s CEO has revealed.

Writing in a blog post, Klaus Goersch set out an ambitious vision for NEOM Airlines, promising that passengers will receive “a completely different travel experience”.

Goersch, who has previously served as chief operating officer of British Airways and Air Canada, argued the new service will be “futuristic and efficient”, adding: “I can honestly say the opportunity here is way beyond anything else out there.”

The development of the airline comes as Saudi Arabia seeks to boost its aviation sector, with Crown Prince Mohammed bin Salman earlier this month announcing a new carrier, Riyadh Air, which will benefit from a $37 billion aircraft deal with US firm Boeing.

In his blog post, Goersch painted his vision for NEOM Airlines as he set out the “new future” for air travel.

He said: “Just imagine if your bags were collected from your home or office and delivered to the hotel or residence you were going to. 

“Imagine if biometrics were advanced enough to recognize you via facial recognition as soon as you walked in a building, security clearing you for travel without the need for even going through a gate – let alone having to bother with a visa. 

“And just imagine the time of your meeting changed by a few hours and you were able to change your flight to a later one, without hassle or cost. 

“Better still, imagine you are collecting loyalty points at the airport – where the whole place is lounge-style service – as well as while flying and when using the facilities in your destination, because everything is owned by the same company.”

Goersch went on to say the airline will initially retrofit existing aircraft in order to get the carrier up and running, before shifting to new planes. 

“Come 2026 onwards, there will be new innovative aircraft – whether it be electric, hydrogen-powered or supersonic – and next-generation interiors coming online from us. We are already in discussions with plane, interior and seat manufacturers,” he wrote.

In keeping with NEOM’s pledge to be environmentally-friendly Goersch said the airline’s ambition is for every flight to have “ some sustainable fuel onboard” originating from mixing facilities at NEOM. 

He added: “Sustainability will even stretch into the catering, with foods sourced locally from here and delivered via on-demand dining at a time when you actually feel like eating. 

“We will look at every single component right down to the carpets and single-use plastics. 

“Little things like this will accumulate and add up to more than the sum of their parts.”

The $500 billion NEOM megaproject is set to transform the Kingdom’s northwest Red Sea coast to a high-tech hub.