Saudi wealth fund starts new airline headed by former Etihad CEO

Saudi Arabia’s wealth fund has named former Etihad Aviation Group boss Tony Douglas chief executive officer of a new national airline, as the country looks to boost tourism and diversify the economy from oil. 

Riyadh Air, as the new airline is called, will be based in the Saudi capital Riyadh and aims to connect the country to more than 100 destinations worldwide, according to a statement. It will be wholly-owned by the Public Investment Fund, also known as PIF. Douglas had been CEO of Abu Dhabi-based Etihad until October.

Saudi Arabia’s ambitions could present a challenge for Emirates, Etihad and Qatar Airways, the existing major airlines in the region. 

The launch of Riyadh Air is part of Saudi Arabia’s strategy to help kickstart its tourism industry and make it one of the world’s most popular destinations. It’s aiming to attract 100 million visitors a year by 2030. Largely closed off to foreign visitors until 2019, Crown Prince Mohammed bin Salman is investing in resorts and airports as part of a plan to wean the economy off a reliance on oil sales.

The airline is expected to add $20 billion to Saudi’s non-oil growth and create more than 200,000 direct and indirect jobs. It will acquire “modern aircraft equipped with the latest technology and will adopt world class sustainability and safety practices,” according to the statement.

The PIF is in talks with Boeing Co. and Airbus SE regarding orders for about 80 jets, the first aircraft purchases for a new national airline, Bloomberg reported in October. The Wall Street Journal reported this week that the fund is nearing a deal for Boeing Co. jets with an order value of $35 billion.  – BLOOMBERG