(Bloomberg) – Saudi Arabia is considering building a new airport in its capital, Riyadh, according to people familiar with the matter, a facility that would serve as the base for a new airline that the kingdom’s sovereign wealth fund is as planned wants to bring to market a huge increase in tourist arrivals.
The $ 430 billion fund announced earlier this year that it would invest in aviation to cope with the tourist boom expected by Crown Prince Mohammed bin Salman. The new airline, which was locally reported earlier this year, would serve tourists and business travelers, while the existing Saudia airline would focus on religious tourism from its base in Jeddah, said people who asked because of the sensitivity of the matter not to be named.
According to the population, the Public Investment Fund is also examining the idea of investing billions in a new international airport in Riyadh. The size of the facility and the schedule for construction have not yet been determined and the PIF may decide not to pursue these plans.
A spokesman for the fund did not want to comment on the plans for a new airport in Riyadh. He referred to previous commitments to invest in the sector and to consider starting a new business to “support the aerospace sector’s endeavors locally and regionally”.
The project, which is still in the early stages of development, would support Saudi Arabia’s goal of attracting 100 million tourists a year by 2030, a six-fold increase compared to 2019. Opening the country to visitors is an important part of Crown Prince Mohammed Bin Salman’s diversification strategy Economy depends on the dependence on oil sales.
The state-owned Saudia is, according to its website, the country’s largest airline with 144 aircraft consisting of a mix of wide-body and narrow-body aircraft from Airbus SE and Boeing Co. During the annual Hajj religious pilgrimage, aircraft with prayer areas are deployed to accommodate visitors en route to Mecca from Jeddah King Abdulaziz International Airport.
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Other airlines in the country include the low-cost airline Flyadeal, owned by Saudia, and Flynas, owned by Prince Alwaleed Bin Talal Al Saud’s Kingdom Holding Co.
Before the pandemic, King Khalid International Airport in Riyadh served more than 28.5 million passengers annually, according to its website.
The Crown Prince’s economic transformation plan has identified the Islamic pilgrimage as an important source of income outside of petroleum. Officials aim to attract 30 million religious travelers annually by 2030. Religious tourism, which includes year-round pilgrimages to Mecca, grossed more than $ 20 billion in 2018, equivalent to 2.7% of GDP.
Until the tourist visa opened in September 2019, Saudi Arabia had long been one of the hardest countries in the world to visit unless it was a pilgrimage. Plans to expand recreational visits include a vision for a new city called Neom, which is expected to cost $ 500 billion.
Saudi Arabia has relaxed some travel restrictions on Covid-19, but has not yet opened it to tourists. It decided to allow nationals and residents to attend the Hajj, which will be held next month, for only the second year in a row, in order to contain the spread of the coronavirus and its variants.
(Updated the sixth paragraph with the Saudia fleet)
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