Saudi Arabia may launch a new cargo airline in future
The country’s PIF is in talks with Boeing and Airbus to get new freighters in alignment with Saudi Arabia’s Vision 2030.
Saudi Arabia’s Public Investment Fund (PIF), the country’s sovereign wealth fund, is in discussions to acquire Boeing and Airbus freighters as part of a plan to launch a new cargo airline, according to a Bloomberg report.
The PIF is in discussions to acquire Boeing 777 and Airbus A350 freighters. The proposed cargo airline is anticipated to support Saudia, the Kingdom’s national carrier, and the newly launched Riyadh Air, as part of a broader strategy to transform Saudi Arabia into a logistics hub, according to the report.
At present, Saudia Cargo is the only cargo airline operating in the country, with a fleet of seven freighters, including three Boeing 747F and four Boeing 777F models. While Riyadh Air will begin its commercial flights in 2025.
However, the discussions are reportedly still in the early stages, with no final decisions reached yet. Sources indicated that the fund might choose to postpone or even abandon the plans altogether.
Things are challenging on the ground as new aircraft orders may not be delivered until 2028-2029. If the company opts for the A350F, it has a higher likelihood of availability compared to Boeing's 777-8F. However, both aircraft are still in the developmental stages, and even if they enter production, flight certification trials could delay their availability. Boeing is currently facing significant issues, as the long-delayed launch of the 777X has encountered another setback. Testing has been halted due to a problem with a structural component connecting the engine and the wings as a result Boeing has grounded its fleet of four test aircraft. The 777-8F, a shortened freighter version of the 777-9 from the 777X family, will likely be affected by these developments.
There are additional challenges, such as global supply chain disruptions, which have impacted aircraft production. For Boeing, converted freighters are currently their best hope.
PIF’s move is significant as the country plans to invest over $133 billion by 2030 as part of its 'Vision 2030' strategy, focusing heavily on the logistics sector. The funds will be allocated to developing over 200 logistics and transport projects in partnership with the private sector. The objective is to enhance Saudi Arabia's role in global trade and facilitate its shift toward a more diversified economy.
The PIF has achieved a significant milestone, with its assets under management reaching $925 billion by July 2024. This success underscores the fund’s strategic investments and initiatives both within the Kingdom and abroad.
