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Saudi Arabia to compete with the Middle East 3

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Saudi Arabia to compete with the Middle East 3

Old 2nd Jul 2021, 14:49
  #1 (permalink)  
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Saudi Arabia to compete with the Middle East 3


DUBAI, July 2 (Reuters) - Saudi Arabia plans to target international transit passenger traffic with its new national airline, going head-to-head with Gulf giants Emirates and Qatar Airways and opening up a new front in simmering regional competition.

Crown Prince Mohammed bin Salman, who is pushing economic diversification to wean Saudi Arabia off oil revenues and create jobs, announced a transportation and logistics drive on Tuesday aimed at making the kingdom the fifth-biggest air transit hub.

Two people familiar with the matter said the new airline would boost international routes and echo existing Gulf carriers by carrying people from one country to another via connections in the kingdom, known in the industry as sixth-freedom traffic.

The transport ministry, which has not released details of the plans, did not respond to a Reuters request for comment.

The strategy marks a shift for Saudi Arabia whose other airlines, like state-owned Saudia and its low cost subsidiary flyadeal, mostly operate domestic services and point-to-point flights to and from the country of 35 million people.

The Saudi expansion threatens to sharpen a battle for passengers at a time when travel has been hit by the coronavirus pandemic. Long-haul flights like those operated by Emirates and Qatar Airways are forecast to take the longest to recover.

Riyadh has already moved to compete with the UAE, the region's business, trade and tourism hub. The Saudi government has said that from 2024 it would stop giving contracts to firms that do not set up regional headquarters in the kingdom.

"Commercial competition in the aviation industry has always been fierce, and regional competition is heating up. Some turbulence in regional relations is on the horizon," said Robert Mogielnicki, resident scholar at the Arab Gulf States Institute.

Dubai, the world's largest international air travel hub, has announced a five-year plan to grow air and shipping routes by 50% and double tourism capacity over the next two decades.

Riyadh has already moved to compete with the UAE, the region's business, trade and tourism hub. The Saudi government has said that starting 2024 it would stop giving contracts to firms that do not set up regional headquarters in the kingdom.

Prince Mohammed is trying to lure foreign capital to create new industries including tourism, with ambitions to increase overall visitors to 100 million by 2030 from 40 million in 2019.

"Saudi Arabia has the ability to push forward with its aviation and tourism strategy when others will be retreating and retracting," aviation consultant Brendan Sobie said.

"It is a risky strategy, but also sensible given its position and overall diversification objective."


However, any airline requires substantial start-up capital and experts warn that if Saudi Arabia's ambition is to compete on transit flights it may have to contend with years of losses.

Saudi Arabia's large population generates direct traffic that could cushion losses as a new airline targets international transit traffic, aviation consultant John Strickland said.

Emirates reported a record $5.5 billion annual loss last month with the pandemic forcing Dubai to step in with $3.1 billion in state support.

Etihad Airways has scaled back its ambitions after it spent billions of dollars to ultimately unsuccessfully compete in building a major hub in United Arab Emirates capital Abu Dhabi.

People familiar with the matter said the new airline could be based in the capital Riyadh, and that sovereign wealth fund PIF is helping set it up.

PIF did not respond to a request for comment.

Saudi Arabia is developing non-religious tourism with mega projects backed by PIF. It has launched social reforms to open up the country, the birthplace of Islam, including allowing public entertainment.

Reporting by Alexander Cornwell; Editing by Tim Hepher and Alexander Smith

krismiler is offline  
Old 2nd Jul 2021, 15:05
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Dry flights? (Never popular with visitors who have spent a few days on the wagon in this 'special' country.)

Last edited by RoyHudd; 2nd Jul 2021 at 15:17.
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Old 2nd Jul 2021, 16:06
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Dead before it’s even born. Moving on.
Klimax is offline  
Old 2nd Jul 2021, 16:50
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Forget it ! No comparison with Dubai neither from the passenger service and organisational aspect nor as a tourist destination. Most Saudis tend to fly to the UAE for R and R if they can afford it.
Jack D is offline  
Old 2nd Jul 2021, 17:45
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No, please, stop. 😁
TURIN is offline  
Old 2nd Jul 2021, 18:46
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Actually, way more T&A than R&R .

The new is quite amusing, specially when it comes to tourism in ksa. Looks that mBS believed in qatar's tale that you can live with a middle-age mindset and be a touristic destination altogether...
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Old 2nd Jul 2021, 18:53
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I work in KSA (although I’m fortunate enough to live in Bahrain) and have to listen to this guff all the time about how Saudi will compete with Dubai and attract millions of tourists within the next few decades.

Leaving aside the thorny matter of being not able to have a drink (or even a pizza with prosciutto on it as you can in neighbouring Bahrain), there’s the bigger issue of the fact that Saudi ‘customer service’ in hospitality terms ranges from cool detachment to downright hostility. Thailand it ain’t.

Spending billions on all this and then staffing it with disinterested Saudis playing with their smartphones is not going to attract anyone from outside KSA. Even the Saudis were falling over themselves to get across the causeway for a little RnR when the travel ban was lifted a couple of months ago….

Most of the folks I know here who work in Saudi and live in Bahrain would rather saw off their arm than have to stay there. Go on vacation there? Please.
reverserunlocked is offline  
Old 2nd Jul 2021, 20:59
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Agreed, Riyadh is hell on earth nothing more than a nest of nasty Wahabis.

Jeddah, however, is totally different and really quite a nice place to be. The people are completely different, they’re open minded, moderate and really nice and have a work ethic not seen anywhere else in the Gulf States. There are decent tourist attractions all along the west coast and the mountain areas. If they hub out of OEJN, I can see it working well. The converse will apply if they choose OERK.
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Old 3rd Jul 2021, 00:20
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Agreed that alcohol would be one of the main factors, and that would need to include duty-free sales at the airport. Foreign cabin crew and frontline customer service staff would be relatively cheap and make a huge difference. Jeddah with a few billion dollars spent on it to upgrade the airport and build a few tourist attractions could be a reasonable stopover, or even a tourist destination in its own right, especially in winter.

Qatar realized that Doha can't compete with Dubai as a stopover or tourist destination and positioned QR as a premium airline with highly competitive fares instead. An attractive option for someone who just wants to get from A to B.

Tehran is actually very well positioned for a hub, and if it hadn't been for the Islamic revolution, Iran Air could be a major hub airline. Back in the 1970s they were a decent outfit.

Time will tell how serious the Saudi rulers are about modernizing and opening up the Kingdom, they may follow the UAE road map. Already they have allowed cinemas, women driving and El AL overflight rights, which would have been unthinkable not too long ago.
krismiler is offline  
Old 3rd Jul 2021, 03:28
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Noticed the other month KSA has female ATC now!
They even sound somewhat enthusiastic in their job.

No more waiting 30 seconds for the usual lethargic response......"Station calling?"
halas is offline  
Old 3rd Jul 2021, 03:43
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If the Oil Price keeps going up, back to record's seen in 2007, they'll certainly have the money to do what they want to do.
The new Saudi city "Neom" will not be a dry city and presumably flights into Neom will not be dry either.
kungfu panda is offline  
Old 3rd Jul 2021, 06:08
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I think it would be foolish to rule them out completely based on past poor performance. I have seen a fundamental shift over the last 5 years that has really surprised me.

Under the surface of what is readily visible, they have implemented technology to improve basic functions. I have experience interacting with banks, medical services and government agencies. 15 years back compared to recently, it is night and day.

Entertainment and music are allowed, single sections are becoming less common, women driving, roads and traffic behaviour are improving from increased monitoring. I have seen countless recent examples of young friendly Saudis working hard and making an effort to provide good service.

Yes... You can still find abundant examples of the old mentality, however; to deny that a shift is taking place is not accurate.

It won't happen overnight and it will be a long road, they are trying to turn the ship.
metro301 is offline  
Old 3rd Jul 2021, 08:21
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In my experience, the women in KSA are a bit more with the program than the men are. They are certainly smarter and more friendly. At the booth on the causeway you can even have a bit of banter with the girls occasionally. By comparison the guys often barely speak English and when they do it’s communicated in grunts, which is a good introduction to the interactions you’ll expect to find once you cross the border!

However I accept that things are changing, but if happiness is V1 at Lagos, for me it’s reaching the Bahrain side of the causeway each afternoon, knowing a cold beer is within reach!

reverserunlocked is offline  
Old 7th Jul 2021, 19:54
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This is a good joke. Saudia is a total mess, besides the new all economy airline with cast & crew from scratch is even more messier. And they want to open one more ? where would they get passengers ? Even Saudi's prefer to fly QR/EK so that they have their drink in the next leg. Definitely they have come a long way from what they were, but they are too slow and far behind. Who on the earth would want to have a vacation in hell?!
IMO this is just going to be a story like Kingdom tower !
Flyboy_SG is offline  
Old 8th Jul 2021, 05:15
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Gulf Air was once the premier airline in the ME but lost out to EK which grew spectacularly. Qatar managed to set upon an award winning mega airline following EK's lead.

You never know.
krismiler is offline  
Old 8th Jul 2021, 12:56
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All it takes is deep pockets and they'll be fine.
Count von Altibar is offline  
Old 8th Jul 2021, 21:59
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Arab face saving could see this venture take off . No pun intended!
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Old 9th Jul 2021, 04:35
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Saudi tourism


This red sea project is quite ambitious and with the airport coming up and a long haul transit point , its not far-fetched . If run professionally and good pricing , there's a market for example India-US/Europe flights with a one day stopover package included , specially when its so heavily subsidized .
Don't write it off completely , interesting times ahead .
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Old 10th Jul 2021, 06:19
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Thumbs up

Inshahlah! Would give many of us a chance to continue our careers
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