Private aviation soars in Saudi Arabia as more businesses take to the skies

Private aviation soars in Saudi Arabia as more businesses take to the skies
The Red Sea International Airport, located within three hours’ flying time of 250 million people, launched its first international flights earlier this year. (Supplied)
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Updated 27 May 2024
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Private aviation soars in Saudi Arabia as more businesses take to the skies

Private aviation soars in Saudi Arabia as more businesses take to the skies
  • Sector set to grow at compounded annual growth rate of 8.88 percent between 2025 and 2029

RIYADH: Saudi Arabia’s business aviation sector is experiencing a surge fueled by the Kingdom’s expanding economy, significant government investment on infrastructure, and a growing influx of high-net-worth individuals.

Valued at $1.2 billion in 2023 according to TechSCI research, this segment is projected to grow at a compounded annual growth rate of 8.88 percent between 2025 and 2029.

It was also highlighted in the General Authority of Civil Aviation’s roadmap unveiled at Riyadh’s Future Aviation Forum in May.

The roadmap aims to support the Kingdom’s development as a global high-value business and tourist destination.

Additionally, it targets a tenfold increase in the contribution to gross domestic product by the general aviation sector to $2 billion by 2030, covering the business jet segment, including charter, private, and corporate planes.

Farid Gharzeddine, captain and CEO of Dubai based private jet company SkyMark Executive, told Arab News: “Saudi Arabia’s private aviation and charter business have always been thriving, serving individuals, business executives, government officials, and special missions.”




Farid Gharzeddine, Captain and CEO of SkyMark Executive. (Supplied)

He added: “In 2023, this sector experienced significant growth driven by the Kingdom’s Vision 2030 and its efforts to diversify away from oil, particularly through the promotion of sectors such as tourism and entertainment. These initiatives had a substantial impact on the private charter industry, influencing both destinations and clientele.”

During this timeframe, he explained that SkyMark Executive, functioning as a private aircraft provider, observed a significant uptick in requests for flights transporting tourists, entertainers, and artists from abroad to emerging destinations such as AlUla, the Red Sea airport, and others.

The Red Sea International Airport, located within three hours’ flying time of 250 million people, launched its first international flights earlier this year.

With a capacity to serve 1 million guests annually, according to the group’s CEO John Pagano, this milestone marks a significant step towards establishing Saudi Arabia as a premier global tourism destination.

According to a research by Mortor intelligence, the GCC region is highly promising for business aviation, and is also a lucrative market for the private aviation sector, due to the presence of a large number of high net worth and ultra-high net worth individuals in the region.

The influx of multinational companies establishing regional headquarters in Riyadh, driven by the Kingdom's efforts to increase foreign direct investment, may have boosted demand for private aviation. This stems from the need for efficient, flexible travel options for corporate executives and high-net-worth individuals, fueling growth in private jet and charter services.

Players are investing in technological advancements to enhance aircraft manufacturing, navigation, and maintenance, anticipating growth in demand for new business jet models offering increased cabin space and long-range capabilities.

Manufacturers such as Gulfstream, Bombardier, and Embraer are focusing on luxury, technology, and performance enhancements to appeal to GCC customers, positioning themselves for growth in the forecast period.




Manufacturers are focusing on luxury, technology, and performance enhancements to appeal to GCC customers, positioning themselves for growth in the forecast period. (Supplied)

Evidence of this is Qatar Executive’s position as the largest operator in the world for two new models from Gulfstream, G500 and G650ER.

Gharzeddine commented that his company’s clients from Saudi Arabia are often one of the most discerning clientele and prioritize state-of-the-art technological advancements when selecting aircraft for their travel needs.

“These clients prioritize excellence in service delivery, emphasizing both technological sophistication and exceptional service standards. They are committed to enhancing their travel experiences to achieve the utmost levels of comfort, safety, and luxury,” he added.

Furthermore, this segment can benefit from Saudi Arabia’s aviation strategy, which aims to expand connectivity to over 250 destinations by 2030. A key component of this plan is privatization, exemplified by the Kingdom's implementation of the first successful public-private partnership model in the Middle East.

GACA also announced during the Future Aviation Forum its targeted investments in six new specialized general aviation airports in the Kingdom, alongside other initiatives.

"These investments are anticipated to enhance infrastructure and service quality within the private aviation sector, making it more appealing to high-net-worth individuals and corporate clients," Gharzeddine commented.

"Improved facilities and services will likely drive increased demand for private jet charters and ownership, boosting the overall efficiency and capacity of the aviation sector. Additionally, these developments will help position Saudi Arabia as a key hub for private aviation in the Gulf region," he added.

Charter business and sustainability

Leading the change in sustainable aviation growth, Saudi Arabia announced its finalization of a comprehensive plan in November to address environmental sustainability within its civil aviation sector, in line with international commitments such as the 2015 Paris  Agreement.

Spearheaded by GACA, the Civil Aviation Environmental Sustainability Plan targets the reduction of greenhouse gas releases, with a zero-emissions goal by 2060.

Saudi Arabia’s initiatives extend to hydrogen fuel infrastructure and green projects like the Circular Carbon Economy, while major developments such as AMAALA and the Red Sea project reflect a commitment to net-zero emissions.

Global business and government leaders consider sustainable aviation fuel a key opportunity for significant reductions in air travel emissions, with numerous initiatives underway to make this energy product a reality.

SAF is derived from renewable hydrocarbon sources and can reduce carbon emissions by 75 percent compared to traditional fossil-based jet fuel.

However, the primary challenge is supply and demand, as production needs to increase significantly to meet the set targets by 2030.

According to Gharzeddine, in addition to the limited supply, achieving economies of scale to reduce production costs is also an ongoing issue, as is the high charge of specialized processing required for biofuels.

Maryam Al-Balooshi, the UAE’s lead negotiator for aviation climate change, also emphasized the urgent need for Gulf countries to produce SAF to compete in the Western-dominated market and support greener flights, as reported by the National News in February.

An important aspect to consider is how technology and artificial intelligence can play pivotal roles in driving sustainable aviation. Advanced flight planning systems use AI to optimize flight paths, reducing fuel consumption and minimizing carbon emissions.

“By analyzing weather patterns, air traffic, and aircraft performance in real-time, AI can suggest more efficient routes and altitudes, ensuring flights operate at maximum efficiency,” Gharzeddine explained.

Predictive maintenance powered by AI also enhances sustainability by identifying potential issues before they become significant problems, thereby reducing downtime and extending the lifespan of aircraft components.

Additionally, AI-driven data analytics can help monitor and manage the carbon footprint of each flight, enabling operators to make informed decisions about fuel usage, weight management, and other factors that influence emissions.

By leveraging advanced technology, AI, and SAF, the private aviation sector in Saudi Arabia can meet growing demand while setting a benchmark for sustainability in the global aviation industry.


Saudi Arabia, UAE banks to post strong credit growth in 2025: Fitch Ratings

Saudi Arabia, UAE banks to post strong credit growth in 2025: Fitch Ratings
Updated 20 min 27 sec ago
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Saudi Arabia, UAE banks to post strong credit growth in 2025: Fitch Ratings

Saudi Arabia, UAE banks to post strong credit growth in 2025: Fitch Ratings

RIYADH: Banks operating in Saudi Arabia and the UAE are expected to post strong credit growth in 2025, driven by high crude prices and the expansion of the non-oil economy, according to an analysis. 

In its latest report, Fitch Ratings projected that banks in the Kingdom will witness a financing growth of around 12 percent in 2025, about twice the average of the Gulf Cooperation Council region. 

The US-based agency added that corporates will account for almost 65 percent to 70 percent of new financing among Saudi banks in 2025. 

The analysis echoes similar views to those put forward by Moody’s in November, which predicted that Saudi Arabia’s Vision 2030 initiative, aimed at diversifying the Kingdom’s economy, could accelerate the growth of the banking sector in the country. 

In its report, Fitch Ratings said: “The operating environment for banks in the Kingdom is underpinned by high oil prices and government spending, which support the country’s giga-projects and the Vision 2030 strategy, resulting in solid non-oil gross domestic product growth.”

It added: “Fitch Ratings forecasts real non-oil GDP growth to average a still strong 4.5 percent over 2024–2025, compared to 5 percent over 2022–2023. We expect the sector’s financial metrics to remain strong in 2025.” 

The report said that the gradual execution of giga-projects should continue to underpin banks’ interest in this segment, although the current share of giga-project-related financing is minor for most rated banks.

However, the credit rating agency warned that the net foreign assets of banks in the Kingdom could continue to be negative in 2025 due to high-cost domestic term deposits and increased demand for foreign currencies. 

Regional outlook

According to the analysis, banks in the Middle East region are expected to maintain sound profitability, solid liquidity, and adequate capital buffers for their risk profiles in 2025, while asset quality should remain stable. 

In November, a report released by S&P Global said that banks in the GCC are expected to maintain strong asset quality, profitability, and ample liquidity through 2025 thanks to solid capitalization and well-managed balance sheets. 

S&P Global, however, warned that heightened geopolitical tensions and a sharp drop in oil prices could negatively affect the creditworthiness of financial institutions in the region. 

UAE

Fitch said that banks in the UAE will enjoy favorable business and operating conditions in 2025 thanks to high oil prices and increased economic activities. 

The analysis added that banks in the Emirates will achieve a loan growth of around 9 percent in 2025, a figure well above the GCC average but slightly below its Arab neighbor, Saudi Arabia. 

“We expect UAE banks’ funding and liquidity to remain strong and deposits will continue growing in line with lending. Liquidity will continue to be supported by large government deposits, driven by the sovereign’s solid net external assets position, still-strong fiscal metrics and recurring hydrocarbon revenues,” added Fitch. 

Egypt

The report highlighted the growth of the banking sector in Egypt and said that general business and operating conditions for financial institutions in the country are expected to improve next year. 

According to Fitch, falling inflation, improved investor confidence, and healthy foreign currency liquidity conditions are some of the major factors that could strengthen the banking sector in Egypt in 2025. 

Bahrain

In Bahrain, credit growth among banks is expected to be reasonable, albeit still modest, compared to GCC peers, at around 4.5 percent in 2025. 

“Fitch expects the business environment for banks in Bahrain to remain adequate, underpinned by some operating condition improvements. Lower lending rates should ease pressures on the sector’s corporate loan books, in particular real estate and contracting,” said the report. 

The credit rating agency predicted stable asset quality metrics for Bahraini banks in 2025, with lower rates providing relief to corporate borrowers and households and the sector profitability to remain sound.

Kuwait

According to the report, the banking sector’s credit growth in Kuwait is expected to hover between 5 percent and 6 percent in 2025, albeit hindered by still-high interest rates and only moderate real non-oil GDP growth. 

The analysis revealed that liquidity among Kuwaiti banks will remain strong next year due to large and stable deposits from government-related entities and gains from high oil prices. 

Oman

Fitch revealed that Oman’s Vision 2040 program aimed at diversifying the country’s economy could open more opportunities for banks in the future. 

“Oman’s Vision 2040 will provide growth opportunities for banks and ensure a healthy lending pipeline in key sectors of the economy, as well as reduce banks’ reliance on government spending in the long run. However, the absence of a deep capital market limits access for corporates to funding sources other than the country’s domestic banks,” said the study. 

The analysis added that liquidity among Omani banks will continue to be supported by stable government and government-related entity deposits, while high oil prices are expected to support the growth in customer deposits. 

Qatar

In Qatar, the general business and operating environment for banks are projected to improve in 2025. 

The report revealed that the credit growth among Qatari banks could pick up to 5.5 percent next year but will remain below that of Saudi Arabia and the UAE due to their particularly strong operating conditions. 

Jordan

In Jordan, the market conditions of banks are expected to remain challenging next year, while the sector will witness a lending growth of 3.5 percent. 

“The operating environment for banks in Jordan remains challenging due to below-potential and structurally weak real GDP growth, and high unemployment and geopolitical risks, which negatively affect tourism and exports,” concluded Fitch.


Fitch affirms Saudi Aramco at ‘A+’ with stable outlook

Fitch affirms Saudi Aramco at ‘A+’ with stable outlook
Updated 22 min 3 sec ago
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Fitch affirms Saudi Aramco at ‘A+’ with stable outlook

Fitch affirms Saudi Aramco at ‘A+’ with stable outlook

RIYADH: Fitch Ratings has reaffirmed Saudi Aramco’s long-term issuer default ratings at “A+” for both foreign- and local-currency ratings, with a stable outlook, reflecting the oil giant’s strong financial standing and its crucial role in the Saudi economy.

The rating is underpinned by Aramco’s robust financial profile, though it is capped by the rating of its majority shareholder, the Saudi government, which owns 81.48 percent of the company. The Public Investment Fund holds an additional 16 percent. According to Fitch, this structure influences Aramco’s ratings due to the government’s significant stake and control.

Fitch assigned Aramco a standalone credit profile of “aa+,” highlighting its solid financial position. The agency also gave the company a short-term IDR of “F1+,” which is aligned with the sovereign rating.

The affirmation comes after Aramco’s strong performance in 2023, when its total liquid production averaged 10.7 million barrels per day, and its hydrocarbon output reached 12.8 million barrels of oil equivalent per day. This performance outpaced major global peers, including Shell, TotalEnergies, and BP.

In its statement, Fitch noted that Aramco’s rating is constrained by Saudi Arabia’s rating, in line with Fitch’s Government-Related Entities Rating Criteria. This is due to the government’s substantial influence over Aramco, particularly its regulation of production levels in accordance with OPEC+ commitments.

Fitch also emphasized the company’s “Very Strong” governance, reflecting the government’s strategic oversight, including the ability to determine Aramco’s maximum sustainable oil production capacity.

Aramco’s conservative financial management further bolsters its credit profile, with the company’s leverage expected to remain lower than that of other major global oil and gas companies. Fitch also praised Aramco’s sustainable dividend policy, which is set to include a base dividend of $81.2 billion in 2024, with additional performance-linked payouts.

“Under our oil price assumptions, we expect Saudi Aramco’s capital expenditures and base dividend payments to be broadly covered by operating cash flow. We also assume that the company has the flexibility to adjust its dividend commitment if oil prices decline or if capital expenditures exceed current forecasts,” Fitch said.

In 2024, Aramco is expected to pay total dividends of $124 billion, including $43.1 billion in performance-linked payouts, reflecting record cash flows from 2022-23. Fitch forecasts a reduction in capital expenditures from $50 billion in 2024 to $35 billion by 2028, with annual dividends projected to decrease to $82 billion over the same period.

The agency also highlighted Aramco’s critical role in Saudi Arabia’s economy, noting the company’s importance as a key provider of feedstock for power generation and other essential industries, in addition to its vast reserves and production capacity.

Fitch anticipates that the Saudi government would provide support if needed, although the company’s strong financial position has historically not required direct state intervention.

On a national level, Fitch assigned Aramco a long-term rating of “AAA (sau)” based on its substantial reserve base, strong profitability, and market position.

The company’s standing was also compared favorably to other prominent Saudi entities, such as Saudi Basic Industries Corp. and Saudi Electricity Co., within Fitch’s National Scale Rating framework.


Robust manufacturing sector lifts Saudi industrial index by 5%: GASTAT

Robust manufacturing sector lifts Saudi industrial index by 5%: GASTAT
Updated 10 December 2024
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Robust manufacturing sector lifts Saudi industrial index by 5%: GASTAT

Robust manufacturing sector lifts Saudi industrial index by 5%: GASTAT

RIYADH: Saudi Arabia’s industrial production index rose by 5 percent year on year in October, driven by robust growth across key economic sectors, official data showed. 

According to figures from the General Authority for Statistics, the index also edged up 0.4 percent month on month, reaching 106.9 points. 

The mining and quarrying sub-index, which includes oil production, recorded a slight 0.4 percent annual increase, with oil output ticking up to 8.97 million barrels per day from 8.94 million a year earlier. 

Despite the annual increase, monthly performance for this sector remained stable with no significant changes recorded between September and October. 

The manufacturing sector continued its robust growth, recording a 12.4 percent year-on-year increase in October. This expansion was primarily driven by a 32.6 percent surge in the production of coke and refined petroleum products compared to the same month of 2023. 

Saudi Arabia’s industrial production, central to Vision 2030, is driving economic diversification through manufacturing and non-oil growth. 

Other contributors to the sector’s growth included the manufacture of chemicals and chemical products, which rose by 0.6 percent, and food products, which grew by 4.8 percent. 

On a month-to-month basis, the manufacturing sub-index advanced by 1.1 percent, driven by a 2.7 percent increase in coke and refined petroleum products and a 0.2 percent rise in chemicals and chemical products.  

Other manufacturing activities exhibited varied growth rates. The manufacture of non-metallic mineral products increased by 1.8 percent year-on-year and 0.8 percent month-on-month. 

Basic metals manufacturing expanded by 4.3 percent annually and 1 percent compared to the previous month. 

Paper and paper product manufacturing saw an 11 percent annual rise and a 1.1 percent monthly increase, while the production of electrical devices grew by 9.2 percent year-on-year and 0.1 percent month on month. 

Furniture manufacturing posted notable growth, rising 14.4 percent annually and 0.5 percent monthly. Other economic activities within the manufacturing sector recorded a 4.3 percent year-on-year increase and a 0.3 percent monthly uptick. 

In the utilities sector, the sub-index for electricity, gas, steam, and air conditioning supply rose by 6.2 percent year on year. Similarly, the sub-index for water supply and sewerage as well as waste management activities climbed by 8.4 percent over the same period. 

These sectors also recorded positive monthly growth. The sub-index for electricity, gas, steam, and air conditioning supply rose by 0.9 percent compared to September 2024, while the water supply, sewerage, and waste management sub-index increased by 1.4 percent. 

In October, oil-related activities expanded by 5.4 percent year on year and 0.5 percent month on month. 

Non-oil activities also showed solid growth, rising 4 percent annually and 0.3 percent monthly. This highlights Saudi Arabia’s commitment to diversifying its industrial base as part of its Vision 2030 initiative. 

The IPI tracks changes in industrial output, using the International Standard Industrial Classification framework to monitor sectors such as mining, manufacturing, utilities, and waste management. 


Pakistan stock market crosses 111,000 points on hopes of interest rate cut 

Pakistan stock market crosses 111,000 points on hopes of interest rate cut 
Updated 10 December 2024
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Pakistan stock market crosses 111,000 points on hopes of interest rate cut 

Pakistan stock market crosses 111,000 points on hopes of interest rate cut 
  • KSE-100 index climbed 1,482.06 points, or 1.35 percent, to reach 111,452.44 points
  • Pakistan slashed interest rates by 250 basis points in November to revive economy

ISLAMABAD: The Pakistan Stock Exchange (PSX) crossed 111,000 points during intra-day trading on Tuesday, analysts said, amid hopes of an interest rate cut.
The benchmark KSE-100 index climbed 1,482.06 points, or 1.35 percent, to reach 111,452.44 points from the previous close of 109,970.38 points, making it the 10th consecutive session when shares traded in green at the market.
Analysts credited the rally to positive sentiment prevailing in the market amid an optimistic overall outlook.
“Not unusual to see profit-taking come through after the steep recent increase,” Raza Jafri, head of equities at Intermarket Securities, told Arab News. “The overall outlook remains bullish though on reducing interest rates and the government’s commitment to reforms.”
Pakistan had slashed interest rate by 250 basis points in November to help revive a sluggish economy, amid a major drop in the annual inflation rate. The State Bank has slashed interest rate by 700 basis points (bps) in four consecutive meetings since June, bringing it to 15 percent.
According to a poll by Topline Securities, 71 percent of participants expect the central bank to announce a minimum rate cut of 200bps at the upcoming Monetary Policy Committee meeting on Dec. 16.
Arif Habib Corporation CEO Ahsan Mehanti said stocks remained bullish after National Savings Schemes rates were cut, amid speculation of further reductions.
“Robust economic indicators, rupee stability and recovery in global equities on receding geo-political tensions played a catalyst role in record surge at the PSX,” he told Arab News.
Pakistan’s annual consumer inflation also dropped to 4.9 percent in November below government projections, primarily due to a high base from the previous year. This marked a decline from 7.2 percent in October and a significant fall from the nearly 40 percent multi-decade high recorded in May 2023.


UAE to impose 15% minimum top-up tax on large multinationals from January

UAE to impose 15% minimum top-up tax on large multinationals from January
Updated 10 December 2024
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UAE to impose 15% minimum top-up tax on large multinationals from January

UAE to impose 15% minimum top-up tax on large multinationals from January
  • DMTT is part of the OECD’s global minimum corporate tax agreement which has 136 signatories
  • UAE’s finance ministry said it is also considering introducing several corporate tax incentives

DUBAI: The UAE will impose a minimum top-up tax (DMTT) of 15 percent on large multinational companies operating in the country starting in January, the finance ministry said on Monday as the government seeks to boost non-oil revenue.
The DMTT is part of the OECD’s global minimum corporate tax agreement which has 136 signatories, including the UAE, to ensure big companies pay a minimum 15 percent and to make tax avoidance harder.
In amendments to the corporate tax law, the UAE’s finance ministry said the DMTT will apply to companies with consolidated global revenue of 750 million euros ($793.50 million) or more in at least two out of the four financial years preceding the ones in which the tax comes into effect.
The UAE, including Dubai, is a hub for multinationals in the Middle East and the tax amendments come a year after the UAE began rolling out a 9 percent business tax, with exemptions for the many free zones that power it's economy.
The DMTT comes under the Organization for Economic Co-operation and Development’s Two-Pillar Solution, which stipulates that large multinational enterprises pay a minimum effective tax rate of 15 percent on profits in each country where they operate.
The UAE’s finance ministry said it is also considering introducing several corporate tax incentives, including one for research and development that would apply for tax periods starting in 2026.
The expenditure-based incentive would offer a potential 30 percent to 50 percent refundable tax credit depending on the size of the company’s operations in the UAE and revenue, the ministry added.
A refundable tax credit for high-value employment activities that would be granted to companies as a percentage of eligible income costs for employees is also being considered and could be applied as early as Jan. 1 2025, the ministry said.
Such proposed incentives remain subject to legislative approval.