Riyadh Air CEO Tony Douglas said that the airline’s financial plans are intact, despite the initiation of a large-scale spending review in Saudi Arabia. Backed by equity from the Saudi Public Investment Fund (PIF), the carrier is set to launch nonstop flights to London starting on October 26, with the opportunity to explore financing for around 182 jets through sustainability-linked debt. The airline will also be leasing some of these aircraft from leading aircraft asset managers.
The airline is well-positioned to support the goal of welcoming 150 million tourists by 2030, when both Expo 2030 and the 2034 World Cup will be held in the nation. The airline’s Boeing 787 models are scheduled to arrive soon, and deliveries are expected to ramp up from one per month next year to two per month by late 2026. This ultimately allows the carrier to target 100 international destinations within the first five years. The first tickets will be offered to airline employees and those of the PIF, and public sales are set to begin early next year.
A Deeper Look At The Airline’s Finances
Riyadh Air is currently funded by equity from Saudi Arabia’s Public Investment Fund. The carrier noted that, despite a state-sanctioned strategic review of the PIF’s funding, the airline’s plans are not going to change. The airline is going to be using multiple kinds of bonds (including Islamic bonds called sukuk) to finance its acquisition of 182 jets. These aircraft will allow the airline to expand the way it aims to, given its extensive and quite ambitious growth plans.
In the near term, the airline’s cash burn is cushioned by phased operations, including its invite-only London flights, which are set to begin later this month before broader sales begin in 2026. The airline is planning to ramp up deliveries from one aircraft per month to two per month by the end of next year, anchoring the capacity needed for the airline to actually grow. From a strategic perspective, the PIF’s ecosystem adds optional funding flexibility for the carrier, according to Yahoo Finance.
A Deeper Look At Riyadh Air’s Impact On The Industry
Riyadh Air’s decision to enter the commercial aviation industry will undoubtedly have an impact on the Middle Eastern competitive landscape. The airline is planning to develop a new global transfer hub in places dominated by Emirates, Qatar Airways, and Etihad Airways. In the near term, the airline’s limited aircraft supply will limit its growth, but a continued intake of Boeing 787 jets will eventually begin to put pressure on regional competitors, especially on overlapping corridors.
The airline is planning on bidding up premium demand as carriers continue to compete on suites, lounges, and overall service. When it comes to Saudi tourism, the airline added nonstop links that will ultimately raise inbound volumes and hotel loadings. This will ultimately offer more schedule choices to corporate travelers, especially those looking to fly between the Middle East and major global business hubs.
With an expansion plan financed by sukuk, sustainability-linked debt, and sale-leaseback processes with aircraft lessors, the airline will continue to deepen its footprint in regional capital markets. Competitors may have to respond by redeploying capacity or tweaking their loyalty systems. At slot-constrained hubs like London Heathrow Airport (LHR), competition will be tighter. Manufacturers, seat makers, and lessors are all set to benefit from this increased competition and regional demand.
What is The Bottom Line?
At the end of the day, Riyadh Air is a dynamic long-haul carrier with big plans for global expansion. The carrier was founded and financially supported by the Saudi government through its principal sovereign wealth fund.
This demonstrates that there is undoubtedly a key element of the airline’s growth and expansion picture that is driven by political motivations. Few are as interested as Riyadh Air is in the continued growth of premium traffic.
The carrier is likely to be one of the first true airlines for the 2020s, which is doubling down on premium traffic. The airline has a big expansion plan and a limited time frame.
