Saudi Arabia is reportedly in the process of considering a significant change in the structure of its national airline. The kingdom is exploring the idea of transferring the ownership of Saudia, also known as Saudi Arabian Airlines, to its sovereign wealth fund, the Public Investment Fund (PIF). This information comes from two individuals who are privy to the discussions.
The potential ownership transfer would not only involve Saudia, one of the oldest airlines in the Middle East, but also its ancillary holdings, including its budget airline subsidiary, Flyadeal. These plans are currently under deliberation and have not been made public.
Initial reports of the PIF’s negotiations to acquire Saudia were brought to light by Bloomberg. However, both PIF and Saudia have refrained from commenting on the matter.
The PIF already has a stake in the aviation industry with Riyadh Air, the country’s latest carrier set to commence operations in the coming year. The Saudi government’s vision is to establish the nation as a pivotal aviation hub. Riyadh Air will operate from the capital city of Riyadh, while Saudia’s base will remain in Jeddah, a city along the Red Sea.
Even with the proposed change in ownership, Saudia is anticipated to continue operating as a distinct entity alongside Riyadh Air, focusing primarily on serving Muslim pilgrims traveling to the holy sites within Saudi Arabia. Conversely, Riyadh Air is expected to cater to general and international transit passengers.
By potentially bringing Saudia under the umbrella of the PIF, the sovereign fund would gain direct oversight and the ability to steer the airline’s strategic direction.