How Middle East Airline Competition Is Transforming Amid Saudi’s Vision 2030 Initiative

Airline competition in the Middle East is escalating as Saudia Arabia aims to hit its capacity target outlined in Saudi Vision 2030, a government program that includes initiatives to accommodate more than 300 million passengers annually. It comes after the country became the second-fastest growing destination for tourism earlier this year.

Capacity to and from Saudi Arabia has also rebounded significantly from the pandemic, complementing the country’s growth targets. Inbound capacity from within the Middle East has reportedly grown the highest, by more than 20% since 2019.

Developing into a global leader

According to OAG, Saudi Arabia had around 7.8 million tourists traveling to the country during the first quarter of this year. The results are the nation’s highest quarterly performance, representing a 64% increase compared to the same period pre-pandemic. The World Tourism Organization reportedly ranked Saudi Arabia 13th worldwide for receiving international tourists last year.

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In 2016, the country launched Saudi Vision 2030 to transform into a global leader in the industry by enhancing experiences for travelers, improving safety, and supporting environmental sustainability. While the government hopes to attract 70 million visitors, the country has ambitious growth targets in the next seven years, such as connecting 250 destinations over 29 airports and welcoming 330 million visitors annually through two global long-haul connection airports.

International capacity exceeds domestic numbers

Saudi Arabia’s domestic air travel market reportedly performed better than other countries during the pandemic, allowing capacity to increase once the majority of restrictions eased. Internationally, there is 20% more capacity than in 2018, which puts it above domestic capacity, according to OAG.

It comes after the country worked hard to attract international passengers, including visa requirements for travelers from established markets. The Saudi Tourism Authority also reportedly offers passengers a free 96-hour stopover visa with flights booked on Saudia or Flynas. The move is one of the ways officials hope to make Saudi Arabia’s tourism offerings more accessible.

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Inbound capacity has increased by 23% since 2019, representing more than 80% of all international capacity. The second-largest market is the Asia-Pacific region, which has grown to make up about 10% of Saudi Arabia’s international capacity. Inbound seats grew the most from Europe but only amounted to around 5% of the share. However, it still outperforms capacity from North America, which has not recovered from the pandemic. According to OAG, capacity is down by 16% from the region, representing 0.3% of Saudi Arabia’s international capacity.

Airline capacity

Saudia, the largest airline in the country, appropriately carries the most capacity at more than 40%, OAG data shows. Flyabdeal and Flynas follow after, sharing about 25% of the market.

With a portion of Vision 2030 focusing on sustainability, Saudia is moving forward with commitments toward new aircraft. Earlier this year, the airline ordered over 30 Boeing 787 Dreamliners and reportedly signed a memorandum of understanding to purchase 100 Lilium eVTOL jets that will offer zero operating emissions.

Source: OAG