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The explanation of the development plans mentions that Riyadh Air, the latest airline in Saudi Arabia, intends to target a specific market for flights to and from the country, instead of directly competing with the extensive hubs of nearby Gulf nations. The CEO described this approach as “super aggressive”.
After the airline’s announcement in March of its initial aircraft order for a minimum of 39 Boeing 787 wide-body jets, with the potential for an additional 33, Tony Douglas addressed the audience. He mentioned that Riyadh Air is currently engaged in discussions with manufacturers regarding a fleet of narrow-body jets. Douglas expressed his belief that this expansion would enable Riyadh Air to cater to over 100 destinations by the conclusion of the decade.
Nevertheless, Douglas, the previous CEO of Etihad airline in Abu Dhabi, stated that Riyadh Air has no intention of using the aircraft to directly compete with Qatar Airways or Dubai’s Emirates, the two leading airlines in the region. These airlines, along with Etihad, have expanded their operations by providing connecting flights to various destinations worldwide through their extensive domestic airports.
Douglas stated that Riyadh Air’s primary focus would be on transporting passengers to and from Saudi Arabia, a country that is actively attracting tourists and investors.
He mentioned that Qatar Airways has an impressive global network and wide reach, considering Qatar as our closest neighbor with a population of 2 million people.
According to Douglas, Qatar had a comparatively small population, but Qatar Airways excelled in offering exceptional connectivity on a global scale to the country.
However, he emphasized that a significant portion of the traffic consists of transfers, whereas point-to-point travel constitutes a relatively small proportion.
The PIF Sovereign Wealth Fund of Saudi Arabia is the owner of Riyadh Air. Nevertheless, the establishment of this airline has sparked a debate on whether the kingdom requires an additional carrier besides Saudia, the current national carrier, and budget airline Flynas.
Crown Prince Mohammed bin Salman, leading the $650 billion PIF, has significantly impacted the economy through its involvement in various sectors including video gaming, tourism, sports, electric vehicle manufacturing, camel milk production, and nicotine vapes.
Douglas admitted that the airline’s plans were excessively ambitious, yet he maintained that the company would still be profitable and that there was a substantial market demand for the new airline.
He stated that Saudi Arabia is experiencing a clear increase in the demand for improved connectivity among its citizens worldwide. Furthermore, he mentioned that the state anticipates a higher influx of tourists and visitors.
It is anticipated that Saudia will shift its focus towards catering to the numerous religious pilgrims who journey to the kingdom’s holiest sites in Islam.
Douglas emphasized that Riyadh Air would provide an unwavering focus on every little detail to ensure an exceptional “guest experience” on board.
He emphasized the significance of Riyadh Air to Saudi Arabia, stating that for numerous upcoming international visitors, their initial encounter with the country will occur aboard Riyadh Air at an altitude of 38,000 feet.
While Douglas did not address the topic of alcoholic beverages, officials emphasized that Saudi Arabia has the potential to appeal to tourists despite its religious orthodoxy and strict prohibition on alcohol. Speculation has arisen regarding the possibility of permitting beverages in tourist areas and Saudi’s emerging business district, but these plans have not yet come to fruition.
In 2020, the airline is scheduled to receive its initial batch of 11 jets from Boeing, with additional aircraft being gradually incorporated as they are manufactured.
Douglas expressed concern over the supply chain limitations faced by the aerospace industry in the aftermath of the COVID pandemic. The sector has encountered difficulties in meeting the sudden surge in air travel demand subsequent to a significant decline in passenger numbers during the coronavirus lockdown.
The Middle East has witnessed a notable surge in demand, especially in the fleet sector. Oliver Wyman’s forecasts indicate that this industry is projected to experience an annual growth rate of 5 percent over the next ten years.
Douglas stated that the supply chain has been under extreme challenges internationally for the past three to four years, encompassing seats, airframe, and engine.
Douglas expressed his optimism that the issues could be resolved as Riyadh Air expands its fleet. However, he emphasized that the airline is closely monitoring the aerospace industry. He observed that there is a significant focus on skills development, recruitment, and retention at present.
Source: www.ft.com
