Air Arabia-led group cleared to launch budget Saudi airline

Saudi authorities have approved a plan by the UAE's Air Arabia Group to establish a budget airline in the kingdom. The new carrier, which will serve 81 destinations by 2030, includes airports in both domestic and international locations. Air Arabia is part of a consortium that also includes Nesma Group and KUN Holding. The three entities won the bid to create and run the airline in July 2025.

The airline is anticipated to enhance competition, improve performance, and support local employment in Saudi Arabia's Eastern Province. It aims to operate 45 aircraft and carry approximately 10 million passengers annually. Sulaiman Almuhaimedi, Gaca's executive vice president, praised the launch for bolstering competition and boosting the air transport market, while creating new job opportunities.

The license was granted following the group's demonstration of "the highest levels of safety and operational compliance." Air travel in the Middle East has been impacted by the ongoing US-Iran conflict, which began on February 2. Airspaces in the region were initially disrupted, but services have gradually resumed as carriers comply with safety assessments.

Despite the challenges, analysts anticipate a robust postwar recovery for the Middle East aviation industry, similar to the post-Covid-19 rebound. In Saudi Arabia, the world's largest economy, the government is investing in aviation by expanding fleets, constructing airports, and promoting air connectivity, all while advancing its tourism sector as part of the Vision 2030 economic diversification plan.