Saudi Arabia’s PIF reportedly plans new cargo airline in logistics hub push

Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), is reportedly in talks with Boeing and Airbus to acquire freighters for a new cargo airline as part of a broader strategy to turn the kingdom into a logistics hub.

Sources familiar with the matter told Bloomberg that the cargo-hauling operation would serve flag carrier Saudia and startup Riyadh Air. PIF is in discussions with both aircraft manufacturers and lessors to acquire Boeing 777 and Airbus A350 freighters.

However, the talks are said to be in the preliminary stages, and no final decisions have been made. Sources said that the fund may ultimately decide to delay or scrap the plans.

The move is part of Saudi Arabia’s push to diversify its economy away from heavy reliance on oil revenues, with an emphasis on tourism, aviation, and logistics.

Over the years, the kingdom has implemented several initiatives and made significant developments aimed at developing the logistics sector while expanding its financial, economic and developmental contributions.

Saudi Arabia’s national transport and logistics strategy seeks to advance the sector’s contribution to the country’s annual non-oil revenues to around $12bn by 2030. Under the initiative, Saudi Arabia’s second national airline – Riyadh Air – will start flights in 2025 and serve more than 100 destinations worldwide by 2030.

The carrier is expected to add $20bn to Saudi Arabia’s non-oil GDP growth and create more than 200,000 jobs both directly and indirectly.

Jeddah-based Saudia, meanwhile, is being repositioned to focus on religious pilgrimages. The flag carrier will gradually move out of Riyadh’s airport and hand over slots to PIF-owned Riyadh Air.

Last year, the two carriers jointly placed an order for 78 Boeing 787 Dreamliners, a deal the White House valued at almost $37bn.

Saudi Arabia also unveiled plans to transform Riyadh Airport into a massive aviation hub with six parallel runways and designed to accommodate up to 120 million travellers by 2030. King Salman International Airport will create 103,000 direct and indirect jobs, handle 185 million travellers and process 3.5 million tonnes of cargo by 2050.

Read: Saudi Arabia’s wealth fund PIF swings to $36.8bn profit in 2023