Saudi Arabia’s Sovereign Wealth Fund in Talks to Acquire Flagship Airline
In a bold move to transform Saudi Arabia into a thriving tourist destination, the country’s sovereign wealth fund is currently in early discussions to purchase the Kingdom’s flagship airline.
The Public Investment Fund (PIF) is contemplating the addition of Saudia to its aviation portfolio as soon as next year, with plans to inject billions of dollars into the venture, as per reports from Bloomberg.
PIF’s Vision for Saudia and Riyadh Air
Insider sources suggest that the PIF aims to take over the airline from the government in a bid to enhance its profitability and efficiency. Furthermore, there is speculation that the carrier may eventually be offered for sale or merged with Riyadh Air, a new airline being established by the wealth fund.
Although the exact valuation of Saudia by PIF remains uncertain, the airline currently operates a fleet of 142 aircraft and serves more than 90 destinations worldwide.
Transforming Riyadh into a Global Business Hub
Saudi Arabia’s ambitions extend beyond the acquisition of Saudia, as the country seeks to position Riyadh as a prominent business hub and compete with other Gulf airlines for international transfer traffic.
With the establishment of Riyadh Air by PIF, the goal is to expand the network and rival regional giants like Emirates and Qatar Airways.
Driving Tourism Growth and Economic Diversification
At the heart of Saudi Arabia’s strategy is the desire to attract 150 million tourists annually by 2030, diversify the economy, and reduce dependence on oil revenue.
PIF is playing a pivotal role in this endeavor, overseeing the transformation of Riyadh’s airport into a major global hub while also investing in ventures like an aircraft leasing company and a helicopter firm.
Boosting Tourism Revenue and Hotel Infrastructure
The Kingdom has secured $13 billion in private sector investments to bolster its tourism industry, with plans to increase the number of hotel rooms by 150,000 to 200,000 within the next two years.
Princess Haifa Al-Saud, Saudi Arabia’s vice minister for tourism, aims to raise tourism revenue to $85 billion this year, with an eye on reaching a GDP contribution of 10 percent by 2030, up from the current 4.5 percent.