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Why is Saudi Arabia launching second national airline?

There are three reasons why Saudi Arabia is launching a new airline:

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Saudi Arabia’s de facto ruler announced plans Wednesday to launch a second national airline, state media said, despite an already crowded aviation market struggling with the coronavirus pandemic.

The airline, part of a push to turn the kingdom into a logistics hub, would be in addition to state-owned Saudi Arabian Airlines, which has suffered losses for years.

“We aim… to increase international connectivity to 250 destinations, and alongside the launch of an additional new national carrier, we aim to double air cargo capacity to more than 4.5 million tons,” Crown Prince Mohammed bin Salman was quoted as saying by the official Saudi Press Agency.

The crown prince did not say when the new airline would be launched, in what is seen as a crowded aviation sector in the Middle East. Saudi Arabian Airlines faces growing competition from other Gulf carriers, including Dubai’s Emirates Airline and the Doha-based Qatar Airways, which offer a wider network.

Under Prince Mohammed, the kingdom’s de facto ruler, OPEC kingpin Saudi Arabia is currently in the midst of a major push to boost investments to fund ambitious plans to diversify the oil-reliant economy.

Read more: Major banks, airlines hit in new global online blackout

The kingdom is considering building a new airport in the capital Riyadh — a base for a new airline –- to cater to international tourists and business travellers, according to Bloomberg News.

According to Arab News, the new airline, reported locally earlier this year, would serve tourists and business travelers, while Saudi national carrier would focus on religious tourism from its base in Jeddah, said the people, asking not to be identified due to the sensitivity of the matter.

However, expanding public sector amid depleting oil revenues is going to be a great risk for the Middle Eastern country.

AFP with additional input by GVS News Desk

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