Weekly Business Insights from Top Ten Business Magazines | Week 301 | Shaping Section | 2

Extractive summaries and key takeaways from the articles curated from TOP TEN BUSINESS MAGAZINES to promote informed business decision-making | Week 301 | June 16-22, 2023.

A Saudi Airline Embraces Luxury to End Emirates and Qatar’s Gulf Dominance

By Siddharth Vikram Philip | Bloomberg Businessweek | June 14, 2023 

Listen to the Extractive Summary of the Article

In the 78 years since Saudi Arabia launched its flag carrier, Saudia, with a plane gifted by US President Franklin D. Roosevelt, the airline has served largely as a means of ferrying the faithful to Mecca while adhering to the country’s strict social rules.

Saudia stands in sharp contrast to regional rivals that have redefined luxury travel. Emirates, Qatar Airways and more recently Turkish Airlines have built megahubs for travelers between Asia, Europe, Africa and North America. And their home bases have increasingly become destinations rather than mere transfer points, with beaches, amusement parks, high-end shopping and sumptuous hotels within easy reach of the arrival gate.

To get in on the action, Saudi Arabia is adding a second carrier, Riyadh Air, aiming to triple arrivals into the kingdom and siphon business and tourists from competitors. While the plan is short on details, the carrier aims to start flying in 2025, with planes bathed in blue and lavender. 

Riyadh Air plans to reach 100 destinations by 2030, connecting passengers through King Salman International Airport, a sprawling new facility rising in the desert near the capital that’s designed to handle 120 million passengers a year by the end of the decade—30% more than Dubai’s current capacity. The carrier has ordered 39 Boeing Co. 787 Dreamliner jets with options for dozens more, and it’s in the market for as many as 400 narrowbodies.  The goal is to tempt them to stay for business meetings or jaunts to the country’s monuments, mountains and beaches.

The moves are part of a wider effort by Crown Prince Mohammed bin Salman to diversify the economy beyond oil, with soft-power investments in sports, entertainment and tourism. But getting the masses to visit a hot, dusty land where liquor isn’t served is a tough sell, no matter how luxurious the planes.

Even piles of cash don’t necessarily spell success, as Douglas’s previous employer, Etihad, can attest who was brought in to clean the mess after the Abu Dhabi flag carrier’s strategy dubbed as “The Residence” – a fleet expansion and in-flight perks such as multiroom suites imploded and losses piled up.

3 key takeaways from the article

1. Saudi Airlines stands in sharp contrast to regional rivals that have redefined luxury travel. Emirates, Qatar Airways and more recently Turkish Airlines have built megahubs for travelers between Asia, Europe, Africa and North America. And their home bases have increasingly become destinations rather than mere transfer points.
2. To get in on the action, Saudi Arabia is adding a second carrier, Riyadh Air, aiming to triple arrivals into the kingdom and siphon business and tourists from competitors. While the plan is short on details, the carrier aims to start flying in 2025, with planes bathed in blue and lavender. 
3. The moves are part of a wider effort by Crown Prince Mohammed bin Salman to diversify the economy beyond oil, with soft-power investments in sports, entertainment and tourism. But getting the masses to visit a hot, dusty land where liquor isn’t served is a tough sell, no matter how luxurious the planes.  Even piles of cash don’t necessarily spell success, according to an industry expert.

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Topics:  Aviation Industry, Travel & Tourism, Saudi Arabia