Saudi aviation sector soaring after record growth, major expansions

Saudi aviation sector soaring after record growth, major expansions
Riyadh Air is set to commence operations in 2025. Shutterstock
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Updated 03 January 2025
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Saudi aviation sector soaring after record growth, major expansions

Saudi aviation sector soaring after record growth, major expansions

JEDDAH: Saudi Arabia’s aviation sector reached new heights over the past 12 months, marked by a surge in passenger numbers, a fleet expansion with new jet acquisitions, and strategic global partnerships.

These advancements are part of a broader vision to establish the Kingdom as a global aviation hub and a top-tier destination for travelers worldwide.

Saudi Arabia is investing billions of dollars as part of its Vision 2030 plan to diversify its economy away from fossil fuels, boosting its private sector, and enhancing connectivity, as well as solidifying its role in the global aviation industry.

As part of this plan, aviation goals for the Kingdom include delivering seamless experiences to 330 million passengers across over 250 destinations, and the transportation of 4.5 million tons of air cargo by 2030.

“This transformative strategy offers lucrative opportunities for the private sector to contribute to the realization of the country’s ambitions,” said President of the General Authority of Civil Aviation Abdulaziz bin Abdullah Al-Duailej.

He added that among these opportunities are the privatization potential of 27 airports, which are currently in preparation for transfer to private ownership.

“Moreover, numerous aircraft requests and destination openings have been approved, providing further avenues for private sector involvement in the sector’s growth and development.” Al-Duailej added.

Passenger numbers and air freight volume surges

Between January and September, Saudi Arabia’s aviation sector achieved record growth, with passenger numbers reaching 94 million, accounting for a 15 percent increase.

The number of flights also saw a 10 percent rise compared to 2023, while air freight volumes approached 1 million tonnes, reflecting a 52 percent increase.

These achievements were announced at GACA’s 14th Steering Committee Meeting for activating the National Strategy for the Aviation Sector, held in October in Dammam.

GACA President Abdulaziz bin Al-Duailej highlighted the expansion of air connectivity during this period, with flights departing to over 150 destinations weekly.

Saudi business aviation soars with Vision 2030 growth

Saudi Arabia’s business aviation sector is booming, driven by the Kingdom’s expanding economy, major government infrastructure investments, and a rising influx of high-net-worth individuals.

Valued at $1.2 billion in 2023, the sector is expected to grow at a compound annual rate of 8.88 percent from 2025 to 2029.

The growth was highlighted in the GACA’s roadmap, unveiled at Riyadh’s Future Aviation Forum in May.

Global firms tapped for King Salman Airport expansion




An image of how King Salman International Airport will look after it has been developed. File

In 2024, global firms such as Foster & Partners, Jacobs Engineering, Mace, and Nera were selected for the next phase of King Salman International Airport’s development in Riyadh.

Led by the King Salman International Airport Development Co., a subsidiary of the Kingdom’s Public Investment Fund, the collaborations will support the airport’s expansion, positioning it as a key hub for tourism and transportation.

Riyadh Air expands fleet, partnerships ahead of 2025 launch

In October, Riyadh Air signed an agreement to purchase 60 Airbus A321neo single-aisle aircraft as it plans to commence its operations in 2025. 

The deal was signed at the 8th Future Investment Initiative in Riyadh.

In the same month the company said that it had plans to order wide-body aircraft capable of seating more than 300 passengers in 2025.

In August, the new airline announced it had secured a multi-year agreement to become the official airline partner of Concacaf, the FIFA Confederation for North, Central America, and the Caribbean.

The deal aims to enhance the airline’s presence in global sports and support Concacaf’s national and club competitions across the Americas. 

In June, Riyadh Air signed agreements with Singapore Airlines and Air China, to establish strategic partnerships and expand its global network.

The agreements focus on interline connectivity, codeshare, frequent flyer programs, cargo services, customer experience, and digital innovation.

The company partnered with China Eastern Airlines to enhance connectivity and digital transformation and with Delta Air Lines to expand North American routes.

In April, the carrier announced a partnership with Artefact to build a data analytics platform and develop AI solutions, enabling hyper-personalization, improved guest experiences, and optimized operations. 

The collaboration aims to revolutionize Saudi aviation through advanced artificial intelligence applications.

“Through AI integration, we aim to redefine travel standards, offering personalized, seamless digital-first experience to our guests ahead of our maiden flight in 2025,” Abe Dev, the airline’s vice president of digital and innovation said.

In May, the airline said it had plans to bolster its aircraft lineup through additional orders, as it requires “a very large fleet” to establish itself alongside regional giants, according to its CEO Tony Douglas.

This move comes as the Kingdom’s second flag carrier ordered 39 Boeing 787-9 jets in 2023, with options for 33 more. “We’re going to make a number of additional orders,” Douglas said.

The airline’s initial destinations will include major cities in Europe, the US East Coast, and Canada, with the inaugural flight scheduled to depart by June 2025.

Saudia boosts aviation with key partnerships, fleet growth




The signing ceremony was attended by French President Emmanuel Macron, Saudi Arabian Airlines Corp. Chairman Saleh Al-Jasser, Saudia Group Director Gen. Ibrahim Al-Omar, and several other dignitaries and ministers. SPA

In December, Saudia entered a strategic partnership with Air France-KLM to expand and localize its maintenance, repair, and overhaul capabilities. This collaboration aims to enhance the Kingdom’s aviation infrastructure and contribute to its economic growth.

In July, the Saudia Group and German aerospace company Lilium NV, developer of fully electric vertical takeoff and landing aircraft, entered into an agreement to purchase 50 confirmed Lilium Jets, with an option for an additional 50 aircraft. The deal will make the Saudi carrier the first airline in the region to invest in sustainable air mobility.

In May, Saudia and Riyadh Air signed an agreement during the Future Aviation Forum to collaborate on training aviation professionals.

During the same event, Saudia Group announced a $19 billion order for 105 A320neo family aircraft, the largest Airbus deal in Saudi history. The planes, including A320neo and A321neo models, will be split between Saudia and its low-cost carrier flyadeal, with deliveries starting in early 2026.

Flyadeal receives first owned plane, aims for 100 by 2030

In 2024, Saudia’s low-cost airline flyadeal took delivery of its first wholly-owned aircraft, an Airbus A320neo.

Announcing the milestone in June, the airline revealed plans to expand its fleet to around 50 aircraft by the end of 2025, doubling to 100 by 2030. As part of its growth strategy, flyadeal also launched seven weekly flights between Riyadh and Sarajevo, utilizing an Airbus A320.

Looking ahead, the airline announced the addition of three new domestic routes starting January. Services from Dammam to Najran and four weekly flights to Tabuk commenced on Jan. 1, followed by three weekly flights to Yanbu starting from Jan. 2.

Flynas secures 280-aircraft deal amid record growth

Flynas, named the Best Low-Cost Airline in the Middle East for the seventh consecutive year, reported a 47 percent rise in passenger numbers, exceeding 7 million in the first half of 2024.

In November, the airline announced new African routes, with flights from Riyadh to Entebbe, Uganda, and Jeddah to Djibouti starting Jan. 8, 2025, under its “We Connect the World to the Kingdom” initiative.

In July, Flynas signed a deal at the Farnborough Airshow to purchase 160 Airbus aircraft, doubling its orders to 280 planes, including 30 wide-body A330neo and 130 narrow-body A320 models. The carrier also celebrated receiving its 53rd A320neo as part of a SR32 billion ($8.5 billion) order for 120 planes.


Saudi wealth fund signs $11bn deals to boost financial markets

Saudi wealth fund signs $11bn deals to boost financial markets
Updated 31 sec ago
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Saudi wealth fund signs $11bn deals to boost financial markets

Saudi wealth fund signs $11bn deals to boost financial markets
  • PIF partners with Franklin Templeton, Neuberger Berman, and BlackRock to accelerate Vision 2030 goals

RIYADH: Saudi Arabia’s Public Investment Fund has signed a series of landmark agreements with leading US financial institutions worth a combined potential investment of up to $11 billion, signaling a major push to strengthen and diversify the Kingdom’s capital markets as part of Vision 2030.

The deals — sealed with Franklin Templeton, Neuberger Berman, and BlackRock — aim to boost local asset management capabilities, deepen investor participation, and enhance the Kingdom’s global financial standing.

These agreements were signed during US President Donald Trump’s visit to Riyadh, underscoring the deepening economic ties between the two nations and the Kingdom’s growing role as a regional and global financial hub.

Agreement with Franklin Templeton

In a major step toward diversifying Saudi Arabia’s investment landscape, PIF signed a memorandum of understanding with Franklin Templeton to jointly invest up to $5 billion. The collaboration will span Saudi equities and fixed income strategies across both public and private markets.

According to a joint statement, the agreement focuses not only on capital deployment but also on knowledge transfer, talent development, and innovation within the local asset management sector.

The move aligns with PIF’s broader agenda to partner with top global financial institutions and expand its international investment portfolio.

Neuberger Berman joins forces with PIF

In a separate deal, the wealth fund has partnered with Neuberger Berman to launch a Riyadh-based multi-asset investment platform with up to $6 billion in assets. The US firm, which manages $515 billion globally, will establish operations in Saudi Arabia — pending regulatory approval — covering equities, fixed income, and private market strategies.

George Walker, CEO of Neuberger Berman, emphasized the firm’s commitment to building local teams, promoting education, and aligning with regional investment priorities under Vision 2030. The agreement is expected to attract further international interest and bolster the Kingdom’s standing as a global investment destination.

Collaboration with BlackRock

Building on an existing relationship, PIF and BlackRock have signed a non-binding letter of intent to deepen their collaboration via a new index mandate focused on Saudi equities. The initiative, announced at the Saudi-US Investment Forum in Riyadh, will be managed through BlackRock’s Riyadh Investment Management platform, established in 2024.

The expanded partnership underscores PIF’s confidence in BlackRock’s capabilities and highlights efforts to diversify investment offerings and advance Saudi Arabia’s capital market ecosystem. While the agreement is subject to regulatory and internal approvals, it marks a significant step in positioning Saudi equities on the global stage.

These agreements follow a series of high-profile engagements aimed at strengthening Saudi-US economic ties, including recent discussions around broader investment flows.

Collectively, the new partnerships reinforce the PIF’s role as a catalyst for financial transformation, in line with the national agenda to diversify the economy and promote sustainable growth.

PIF’s latest annual report revealed a 390 percent surge in assets under management since the 2016 launch of Vision 2030 — underscoring the rapid pace of institutional development and global investor interest in the Kingdom.


ACWA Power expands Saudi-US energy cooperation with $500m deals

ACWA Power expands Saudi-US energy cooperation with $500m deals
Updated 14 May 2025
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ACWA Power expands Saudi-US energy cooperation with $500m deals

ACWA Power expands Saudi-US energy cooperation with $500m deals

RIYADH: Saudi Arabia’s ACWA Power has signed new agreements worth $500 million with several US firms, further solidifying its strategic ties with the country and expanding the scope of joint energy projects to over $6 billion.

The memorandums of understanding were formalized during the Saudi-US Investment Forum held in Riyadh, underlining ACWA Power’s ongoing commitment to leveraging international partnerships in support of the Kingdom’s Vision 2030 goals and its net zero target by 2060.

The agreements come in the wake of US President Donald Trump’s visit to Saudi Arabia, during which he was accompanied by a delegation of leading business figures.

“These strategic partnerships with leading American companies are a direct investment in the future of Saudi Arabia, aligning with the key objectives of Vision 2030,” said Raad Al-Saady, vice chairman and managing director of ACWA Power.

He added: “ACWA Power is committed to leveraging American innovation and expertise to accelerate the development of renewable energy solutions, creating jobs, diversifying the economy, and supporting a sustainable future for the Kingdom.”

Among the highlights of the new collaborations, ACWA Power will work on deploying advanced tracker technologies for photovoltaic solar energy projects, with the aim of reducing energy costs and boosting local production.

“ACWA Power’s strategy is driven by value-driven partnerships like these. Access to cutting-edge technology and expertise is critical as we diversify our portfolio, expand into new markets, and achieve our objectives in meeting net zero by 2050,” said Marco Arcelli, CEO of ACWA Power.

The Saudi-listed company also signed a deal with GE Vernova to test innovations in combined-cycle gas turbine projects and electricity transmission and distribution systems within the Kingdom.

A separate agreement was signed with Baker Hughes to pilot innovations in green hydrogen production.

The collaboration aims to leverage the US-based firm’s technical expertise in developing electrolysis solutions that enhance the safety and efficiency of hydrogen generation.

The partnership may also pave the way for in-Kingdom manufacturing, fostering a local ecosystem for innovation in green hydrogen technologies.

In addition, ACWA Power announced a partnership with KBR for the execution of large-scale projects. 

The agreement will utilize the US firm’s ammonia processing technology and engineering capabilities, alongside its program management and operational expertise to ensure project success.

Another agreement involves Energy Recovery, focusing on research into energy-saving operation technologies in seawater desalination.


Oman, Japan sign deal to tackle environmental issues

Oman, Japan sign deal to tackle environmental issues
Updated 14 May 2025
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Oman, Japan sign deal to tackle environmental issues

Oman, Japan sign deal to tackle environmental issues

RIYADH: Oman’s Environment Authority and Japan’s Ministry of the Environment have signed a bilateral agreement aimed at enhancing cooperation on environmental issues and advancing sustainable development, according to the Oman News Agency.

The agreement seeks to strengthen the implementation of international environmental treaties, including the Paris Agreement, and lays the groundwork for a collaborative framework based on equality, reciprocity, and mutual benefit.

To combat climate change, Oman has launched a national plan aiming for zero-carbon neutrality by 2050. The strategy includes a comprehensive transition of the energy sector toward renewable sources, enhanced energy efficiency, and significant emission reductions across all sectors.

The pact was signed by Abdullah bin Ali Al-Amri, chairman of Oman’s Environment Authority, and Matsuzawa Yutaka, vice-minister for Global Environmental Affairs at Japan’s Ministry of the Environment. The signing ceremony was attended by Japan’s Ambassador to Oman Kiyoshi Serizawa.

Key areas of cooperation outlined in the agreement include climate change mitigation and adaptation, waste management, biodiversity conservation through nature-based solutions, and environmental monitoring.

The two nations also agreed to collaborate on training programs, expert exchanges, scientific research, and joint initiatives. The partnership will promote knowledge sharing and foster dialogue on both current and emerging environmental challenges.


OPEC cuts non-OPEC+ oil supply forecast amid falling investment

OPEC cuts non-OPEC+ oil supply forecast amid falling investment
Updated 14 May 2025
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OPEC cuts non-OPEC+ oil supply forecast amid falling investment

OPEC cuts non-OPEC+ oil supply forecast amid falling investment

RIYADH: OPEC has lowered its forecast for oil supply growth from non-OPEC+ producers in 2025, citing reduced capital spending and mounting market pressures.

In its monthly report released Wednesday, OPEC said it now expects oil output from countries outside the OPEC+ alliance to increase by about 800,000 barrels per day in 2025 — down from last month’s estimate of 900,000 bpd.

OPEC+—which includes OPEC members, Russia, and other allied producers— has struggled in recent years to stabilize the market amid surging production from US shale and other non-member nations. A slowdown in that growth would ease the path for OPEC+ to manage supply more effectively.

The group also reported a projected 5 percent decline in capital expenditure on oil exploration and production outside OPEC+ in 2025. This follows a $3 billion increase in 2024 investment, which brought total spending to $299 billion.

“The potential impact on production levels in 2025 and 2026 of the decline in upstream E&P oil investments will constitute a challenge, despite the industry’s continued focus on efficiency and productivity improvements,” the report said.

While the US remains the leading source of non-OPEC+ supply growth, OPEC has revised its US output forecast downward, now expecting an increase of 300,000 bpd in 2025 compared to 400,000 bpd predicted last month.

Oil prices have come under additional pressure recently following OPEC+’s decision to accelerate output increases in May and June, as well as the implementation of new trade tariffs by President Donald Trump.

Despite global economic headwinds, OPEC left its forecasts for oil demand growth in 2025 and 2026 unchanged, after cutting them last month. The decision reflects updated data from the first quarter and the influence of shifting trade dynamics.

The group welcomed the recent trade deal between the US and China, calling it a sign of potential longer-term stabilization.

“The 90-day trade agreement between the US and China suggests the potential for more lasting agreements, likely supporting a normalization of trade flows but at potentially elevated tariff levels compared to pre-April escalations,” OPEC said.


EV surge poised to displace 5m barrels of oil per day by 2030, led by China: IEA  

EV surge poised to displace 5m barrels of oil per day by 2030, led by China: IEA  
Updated 14 May 2025
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EV surge poised to displace 5m barrels of oil per day by 2030, led by China: IEA  

EV surge poised to displace 5m barrels of oil per day by 2030, led by China: IEA  

RIYADH: Electric vehicles are set to displace more than 5 million barrels of oil per day globally by 2030, highlighting their growing role in reshaping fuel demand and bolstering energy security, a new report stated.    

China alone is expected to account for half of this displacement, according to the International Energy Agency’s latest global publication, as it continues to dominate global EV sales, manufacturing, and battery production.    

This shift is being driven by the rapid uptake of EVs across both developed and emerging economies, and in 2024, global electric car sales exceeded 17 million units — an increase of 3.5 million over the previous year and equivalent to the entire global market in 2020.  

The momentum is set to continue in 2025, with sales expected to surpass 20 million vehicles, capturing more than one-quarter of total car sales worldwide, the IEA stated.    

Saudi Arabia is no stranger to the global EV transition. As part of its Vision 2030 plan to diversify the economy and reduce reliance on oil, the Kingdom aims for 30 percent of vehicles in Riyadh to be electric by the end of the decade.  

The Saudi Public Investment Fund holds a 61 percent stake in US-based Lucid Motors, and the Kingdom has also launched its own EV brand, Ceer.  

In its latest report, the IEA said: “Across all vehicle modes, the deployment of EVs replaces the use of more than 5 million barrels of oil per day globally in 2030, an important energy security consideration. Half of these savings are the result of EV adoption in China.”    

As EV adoption expands across vehicle types and regions, the cumulative effect on oil demand is becoming increasingly significant.    

China leading the way 

China remains at the center of this transformation. In 2024, the country sold more than 11 million electric cars — representing nearly half of all domestic car sales — and is projected to reach a 60 percent EV sales share in 2025.   

By the end of the decade, EVs are expected to account for 80 percent of all new car sales in China.  

Europe and Southeast Asia are also playing crucial roles. In Europe, stricter carbon dioxide emissions targets are forecast to increase the share of EVs to nearly 60 percent of all car sales by 2030, though this is slightly lower than previous forecasts.  

In Southeast Asia, strong policy support and emerging domestic manufacturing capacity are projected to lift EV sales to 25 percent by 2030.  

Electrification in the region is even more pronounced for two- and three-wheelers, with nearly one in three expected to be electric by the end of the decade.  

In contrast, the US is expected to see more modest growth. Based on current policies, EVs are projected to reach just 20 percent of new car sales by 2030 — significantly below earlier expectations.  

While US electric car sales rose 10 percent in 2024 to reach a 10 percent market share, and are on track to grow further in 2025, the long-term trajectory has been tempered by policy uncertainty and higher vehicle price premiums compared to internal combustion engine vehicles.  

“Emerging markets in Asia and Latin America are becoming new centers of growth, with electric car sales jumping by over 60 percent in 2024 to almost 600,000 – about the size of the European market 5 years earlier,” the report said.  

Brazil saw EV sales more than double to 125,000 vehicles, capturing more than 6 percent of new car sales, the report stated.  

In Southeast Asia, EVs accounted for 9 percent of the market, with higher penetration rates in countries like Thailand and Vietnam.  

“Sales in Africa also more than doubled, too, mostly thanks to growing sales in Egypt and Morocco, though electric cars still represent less than 1 percent of total car sales across the continent,” the report said.    

Saudi Arabia’s drive to EV growth 

Saudi Arabia’s EV ambitions have seen PIF investing over $10 billion in Lucid, which built its first international plant in King Abdullah Economic City, marking a critical step in domestic EV manufacturing.  

Ceer, being developed with Taiwan’s Foxconn, will form a crucial part of the Kingdom’s goal of producing 500,000 EVs annually by 2030.  

To support this growth, Saudi Arabia plans to deploy 5,000 fast chargers by 2030 and is expanding its renewable energy portfolio to power EV infrastructure sustainably.  

While absent from the latest global EV outlook, Saudi Arabia’s investments signal a strategic shift in preparation for a lower-carbon future and the long-term impact of EVs on oil demand.  

Oil out, batteries in   

As EV adoption accelerates globally, the displacement of oil use is expected to intensify.    

Two key segments — light-duty passenger vehicles and heavy-duty trucks — are converging on tipping points for oil substitution.  

In China, where battery electric trucks have already reached total cost of ownership parity with diesel in certain applications, electric truck sales doubled in 2024 to 75,000 units, accounting for over 80 percent of the global market.  

By 2030, EV trucks in Europe and the US are also projected to achieve TCO parity for long-haul applications, further contributing to the reduction in oil consumption.  

Battery costs — an important driver of EV affordability — continued to decline sharply in 2024, particularly in China where prices fell by 30 percent, compared to a 10 percent to 15 percent drop in the US and Europe.  

Low prices of critical minerals and increasing manufacturing efficiencies have also contributed to making EVs more economically attractive.  

In emerging markets, Chinese EVs are enabling faster market penetration through lower price points.  

In Thailand, the average electric car is now priced on par with ICE models, and in Brazil, the price gap narrowed from over 100 percent in 2023 to 25 percent in 2024.  

Similarly, in Mexico, the premium dropped from more than 100 percent to around 50 percent as Chinese vehicles accounted for two-thirds of EV sales.  

Trade and industrial policy developments could affect the pace and scale of this oil displacement.  

Several countries are introducing or considering tariffs on Chinese EVs, prompting manufacturers to diversify export markets or increase overseas production.  

While lower oil prices could narrow the cost savings between EVs and internal combustion engine vehicles, the former are expected to remain competitive under a wide range of scenarios.  

Even at benchmark oil prices of $40 per barrel, home-charging in all major markets would offer significant savings compared to conventional fueling.  

In China, where public fast-charging costs are about twice that of home-charging, EVs still provide a cost advantage over petrol-powered vehicles.