Air Arabia-led group cleared to launch budget Saudi airline

Saudi authorities have approved a plan by a group led by the UAE-based Air Arabia to establish a budget airline in the country. The new carrier, to be operated from King Fahd International Airport in Dammam, aims to serve 81 destinations, including 24 domestic and 57 international, by 2030. The consortium, comprising Air Arabia, Nesma Group, and KUN Holding, received an air operator certificate from the General Authority of Civil Aviation (Gaca) in July 2025.

The airlines' launch is expected to stimulate tourism in the Eastern Province, generate over 2,400 direct jobs, and operate 45 aircraft, carrying approximately 10 million passengers annually by 2030. Gaca's executive vice president of aviation safety and environmental sustainability, Sulaiman Almuhaimedi, emphasized that the airline's launch will enhance competition, improve performance in the air transport market, and bolster trade and tourism in the Eastern Province, while creating new local employment opportunities.

The approval comes after the group assured Gaca of the highest safety and operational standards. The Middle East's aviation sector has faced challenges due to the ongoing US-Iran war, with airspace closures impacting air travel. However, as carriers gradually resume services and analysts predict a strong post-war rebound similar to the one following the Covid-19 pandemic, the Saudi aviation industry remains resilient.

The government is investing in fleet expansion, airport construction, new facilities, and air connectivity, as part of the Vision 2030 economic diversification plan.