Saudi tourism push to boost country’s aviation sector: report

Saudi Arabia’s airline market is poised for rapid growth over the next few years as the Kingdom works to expand its aviation and tourism sectors to diversify its economy as part of the Vision 2030 reform plan, research and advisory firm CAPA-Centre for Aviation said in a recent report.

Over the past year, the passenger aircraft fleet in Saudi Arabia has grown by 15 percent, driven by rapid expansion at Saudia and Flyadeal, the report said.

Low-cost carriers (LCC) are particularly well positioned to see further growth as low fares stimulate demand among the young population.

The two LCCs in Saudi Arabia – the privately owned Flynas and Saudia subsidiary Flyadeal – are already in expansion mode.

Flynas has placed orders for 80 A320neos, which will allow the airline to triple its fleet over the next eight years, while Flyadeal plans to place an order for 30 new generation narrow-body aircraft, the report said.

Currently, government-owned Saudia continues to dominate the Saudi Arabian market. At present, Saudia accounts for approximately 68 percent of domestic seat capacity and 36 percent of international seat capacity, the report said.

Flynas is the second largest airline, with nearly a 20 percent domestic share and a 5 percent international share.

The three recent start-ups – SaudiGulf Airlines, Nesma Airlines, and Flyadeal – account for the remaining 13 percent share of the domestic market, led by Flyadeal.

“Flyadeal has been able to quickly secure more than a 7 percent share of domestic capacity, lifting the Saudia Group total to a powerful 75 percent,” the report said.

CAPA-Centre for Aviation believes Flyadeal could soon become Saudi Arabia’s second largest airline.

“Its position as the only pure LCC and its relationship with Saudia will obviously help, but overcoming intense expansion from start-ups and Flynas as it reaccelerates its expansion could be challenging,” it said.