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Saudi private sector’s contribution to real GDP up 3.4% in Q3

The Kingdom has launched strategic initiatives as part of the National Industrial Development and Logistics Program and the Saudi Export Development Authority, which introduced the ‘Made in Saudi’ program in 2021.File
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Updated 24 December 2023
Dayan Abou Tine
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Saudi private sector’s contribution to real GDP up 3.4% in Q3

  • Hospitality, manufacturing fuel surge in Saudi Arabia’s gross domestic product
Updated 24 December 2023
Dayan Abou Tine

RIYADH: Saudi Arabia’s private sector’s contribution to the country’s real gross domestic product increased 3.4 percent year-on-year in the third quarter of 2023, official data showed.

The General Authority of Statistics revealed commercial enterprise added SR322.08 billion ($85.86 billion) to the Kingdom’s output in the three months to the end of September — a 45 percent share of the overall figure. This was primarily led by hospitality, manufacturing, real estate and financial activities.

This growth reflected the Kingdom’s efforts to foster an enabling environment with strategic planning and supportive initiatives.

Saudi Arabia’s real GDP stood at SR719.1 billion in the third quarter, reflecting a 4 percent decline from the previous year. 

The annual decrease is primarily due to a 17 percent reduction in the contribution of oil activities to SR255 billion in the third quarter compared to the year-ago period.

The fall in oil activities resulted from the voluntary crude production cuts initiated in April, agreed upon as per the agreement of the Organization of the Petroleum Exporting Countries and its allies, also known as OPEC+.

However, the figure rises to SR727.54 billion after adjusting for predictable seasonal patterns, reported GASTAT.

On Nov. 1, the Finance Ministry’s budget performance report revealed a 36 percent decline in oil revenues in the third quarter to SR147.01 trillion compared to the corresponding period last year.

Conversely, non-oil activities contributed positively to real GDP, marking a 3.5 percent increase to SR345.9 billion. This sector added SR111.53 trillion to the Kingdom’s budget, representing a 53 percent revenue increase during the period under review.

HIGHLIGHTS

A vital catalyst to the non-oil industry performance was the Kingdom’s Shareek Program, an investment and diversification strategy to grow private sector investments.  

Government initiatives, such as the Financial Sector Development Program, have propelled the sector’s expansion, establishing over 201 entities in financial technology, surpassing the target of 150 companies by 2023.

The launch of the Saudi Insurance Authority in November is also expected to enhance the industry’s efficiency and contribution further, supporting private sector growth. 

Wholesale and retail trade, along with restaurants and hotels, demonstrated positive growth in the Kingdom’s GDP, marking the second-highest contribution of 10.32 percent to the total, amounting to SR74.23 billion.

A vital catalyst to the non-oil industry performance was the Kingdom’s Shareek Program, an investment and diversification strategy to grow private sector investments.  

Launched in 2021 by Saudi Crown Prince Mohammed bin Salman, the program has created a fresh wave of business opportunities in the Kingdom.

In March, the program announced signing framework agreements for 12 projects with a combined investment of SR192.4 billion.

Private sector growth

Within the private sector, finance, insurance, real estate, and business activities made an 11 percent contribution in the third quarter to nearly SR79 billion, growing by 3.68 percent over the same period last year.

Government initiatives, such as the Financial Sector Development Program, have propelled the sector’s expansion, establishing over 201 entities in financial technology, surpassing the target of 150 companies by 2023.

The launch of the Saudi Insurance Authority in November is also expected to enhance the industry’s efficiency and contribution further, supporting private sector growth. 

This move is crucial to integrating Saudi Arabia’s insurance sector with the global financial landscape, ensuring stability, protecting policyholders’ rights and fostering innovation and growth within the industry.

Wholesale and retail trade, along with restaurants and hotels, demonstrated positive growth in the Kingdom’s GDP, marking the second-highest contribution of 10.32 percent to the total, amounting to SR74.23 billion.

Manufacturing, excluding petroleum refining, contributed 8.01 percent of real GDP, totaling SR57.63 billion. This share can be attributed to the Kingdom’s dedicated efforts to boost the industrial sector’s competitiveness, enhance the value of local content and support locally manufactured products.

These strategic initiatives are part of the National Industrial Development and Logistics Program and the Saudi Export Development Authority, which introduced the “Made in Saudi” program in 2021, emphasizing the promotion of local talent and innovation.

In the third quarter, Saudi Arabia witnessed a significant surge in industrial development, granting 412 new licenses, marking an 83.9 percent increase compared to the corresponding period in the previous year, according to the Ministry of Investment.

Speaking at the Industrial Sector Enablers’ Forum organized by the Riyadh Chamber, Mohammed Al-Swailem, the undersecretary of the Ministry of Industry and Mineral Resources for industrial services, unveiled the Kingdom’s ambition to reach 36,000 establishments by 2035, aligning with the National Industrial Strategy.

In August alone, the number of factories experienced a 3.76 percent surge, reaching 11,110, compared to 10,707 in the same month the previous year.

Transport, storage and communication made a SR39.62 billion contribution to real GDP — 5.51 percent of the total. This kind of economic activity has shown a positive growth of 5.14 percent during this period.

According to the Ministry of Finance, the National Transport and Logistics Strategy is anticipated to position the Kingdom as a global logistics hub, connecting three continents. The strategy aims to triple the number of passengers in the aviation sector, reaching 330 million by 2030.

As part of this initiative, King Salman International Airport is set to expand its capacity to accommodate 120 million passengers, connect the Kingdom with 250 new destinations, and enhance airfreight capacity to 4.5 million tons annually by 2030.

Additionally, the communications and technology market in the Kingdom is projected to reach SR163 billion by the end of 2023, reflecting a 6 percent growth compared to 2022, according to the ministry. 

Notably, the sector attracted $4 billion in investments in cloud computing from major global companies, including Microsoft, Oracle, Huawei and Zoom.

Despite a small percentage share of 3.46 percent of GDP, community, social, and personal services exhibited the highest growth of 11.83 percent during this period, amounting to SR24.87 billion.

In addition to the gross value added contributed by the private sector, government activities and net taxes on products comprised 12.86 percent and 3.58 percent, respectively, of the real GDP. 

Notably, taxes on products exhibited the highest growth among all economic activities, experiencing a significant increase of 26.77 percent during this period and reaching 25.75 billion.

Public sector contribution

Within the public sector, government activities contributed SR92.45 billion to the Kingdom’s real GDP, constituting a 12.86 percent share. This sector witnessed a 2 percent growth during the specified period.

According to the revised budget estimates released by the Finance Ministry for fiscal year 2023, real GDP is expected to grow by 0.03 percent, while the non-oil sector is anticipated to expand by 5.9 percent.

The fiscal year 2024, however, looks promising, with a projected 4.4 percent growth in real GDP, supported by the expansion of non-oil activities resulting from economic reforms and efforts to accelerate economic diversification.

This growth is also attributed to programs establishing the private sector as a critical economic driver and job creator, aligning with the goals of Saudi Vision 2030. Various initiatives under Vision 2030 remain integral to achieving national transformation objectives.

Topics: SaudiVision2030 Saudi private sector GDP economy hospitality manufacturing

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Pakistan ports face export backlog as India’s transit ban forces shipping lines to reroute

Updated 10 May 2025
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Pakistan ports face export backlog as India’s transit ban forces shipping lines to reroute

  • Shipping companies launch special feeder services via Colombo to handle cargo from Pakistan
  • Some international shipper are imposing up to $800 surcharge per container amid the situation
Updated 10 May 2025
Ismail Dilawar

KARACHI: Pakistan is facing a “big backlog” of export containers at its ports after international shipping lines began bypassing the country, following India’s decision to block vessels carrying Pakistani cargo, officials and shipping documents confirmed to Arab News on Friday.
The disruption has led several global shipping companies to impose emergency operational surcharges on Pakistani cargo, citing the “significant impact” of regional geopolitical tensions on their operations.
The move is expected to raise shipping costs and, ultimately, consumer prices in Pakistan, a country of over 240 million people already grappling with economic challenges.
“The European shipping services are bypassing Pakistan ports after India’s ban on the transit of ships loaded with cargoes from Pakistan,” said Syed Tahir Hussain, Secretary General of the Pakistan Ship Agents Association (PSAA).
He accused New Delhi of attempting to undermine Pakistan’s recovering economy, which has shown signs of stabilization under the International Monetary Fund’s (IMF) $7 billion loan program.
PSAA Chairman Mohammed A. Rajpar called India’s move “unwarranted” and against international conventions, saying it was designed to discourage shipping lines from calling at Pakistani ports.
The situation comes as Islamabad is attempting to break free from its boom-and-bust economic cycles by boosting exports, which rose 6 percent to $27 billion through April, according to the Pakistan Bureau of Statistics.
Until recently, many international shipping services transited Pakistani cargo through India’s largest ports — Mundra and Nhava Sheva — by loading what is termed Remaining On Board (ROB) freight.
However, India embargoed this practice last week, prompting several carriers to remove Pakistani ports from their routes and instead launch dedicated feeder services to handle trade valued at approximately $87 billion last year.
Most of Pakistan’s containerized cargo is handled through the South Asia Pakistan Terminal (SAPT) operated by CH Hutchison Holdings, Qasim International Container Terminal (QICT) run by DP World and the Karachi Gateway Terminal managed by Abu Dhabi Ports Group.
“Some vessels carrying Pakistan’s exports sailed from QICT were not allowed berthing in India,” said Hussain, whose association represents over 50 international shipping lines.
“They had to divert to Dubai and other nearby ports,” he added, without specifying when the incident occurred.
Shipping documents seen by Arab News show that at least four vessels were denied entry by Indian authorities earlier this week due to “Karachi onboard cargo.” These ships were rerouted to Colombo in Sri Lanka and Jebel Ali in the United Arab Emirates.
Swiss carrier MSC Mediterranean Shipping redirected all destination cargo via Colombo aboard its vessel MSC Positano V-JP526R, which had been scheduled to call at QICT on May 6.
This change, MSC said in a customer notice, was “due to the current geopolitical situation and restrictions on imports and exports via/from India.”
French shipping giant CMA CGM has removed Karachi from at least four of its service routes, citing the need to adjust operations to and from Pakistan.
“BIG BACKLOG” AT PORTS
Export congestion is building at Pakistani ports as hundreds of containers await shipment.
“There is big backlog,” said Khurram Mukhtar, Patron-in-Chief of the Pakistan Textile Exporters Association (PTEA).
Textiles remain Pakistan’s largest export sector, contributing $17 billion last year.
Mukhtar noted that most shipping lines were now planning to route exports through Colombo, with system updates expected by Monday.
MSC has launched a “Pakistan-Colombo Shuttle Service,” a weekly feeder vessel that will transport export containers to Sri Lanka for onward connections to global destinations.
Amid the ongoing crisis, international shipping lines have begun imposing surcharges on Pakistani exporters and importers.
CMA CGM has introduced an Emergency Operational Recovery Surcharge (EORS) of up to $800 per container for shipments to the US, Latin America and Australia, effective from May 15 through June 6.
The French firm said the surcharge was necessary to maintain service reliability and safety during this period. CMA CGM operates more than 250 routes globally with a fleet of 650 vessels.
“Pakistan’s exports are suffering,” said a senior official at one of Pakistan’s major container terminals, speaking on condition of anonymity.
“This will lead to the buildup of a huge container backlog at Pakistani ports,” the official said. “There will be issues like port demurrages. The shipping lines will be charging the consignees with detentions.”

Topics: Karachi port Pakistan economy India strikes Pakistan Pakistan strikes India Pakistan India clash

PM Sharif announces IMF approval of $1 billion disbursement to Pakistan under $7 billion deal

Updated 09 May 2025
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PM Sharif announces IMF approval of $1 billion disbursement to Pakistan under $7 billion deal

  • The prime minister expresses satisfaction India’s ‘efforts to sabotage’ the loan program had failed
  • He says Pakistan’s economic situation is improving and it is moving toward financial progress
Updated 09 May 2025
Ismail Dilawar

KARACHI: The International Monetary Fund (IMF) approved a $1 billion disbursement for Pakistan under a loan program secured by the government last year, Prime Minister Shehbaz Sharif said in an official statement late Friday.

The announcement followed an IMF Executive Board meeting to finalize staff-level agreements related to the $1 billion payout, as well as Pakistan’s new $1.3 billion arrangement under a climate resilience facility approved in March.

The meeting took place at a time when Pakistan is working to revive investment amid a gradually stabilizing macroeconomic environment, following a prolonged downturn that compelled it to seek external financing from allies and global lenders.

“Prime Minister Shehbaz Sharif expressed satisfaction over the IMF’s approval of the $1 billion tranche for Pakistan and the failure of India’s underhanded tactics against the country,” his office said in a statement issued after the board’s decision.

Media reports said recently India had attempted to pressure the IMF to block the disbursement, citing heightened military tensions between the two neighbors following a deadly April 22 attack in Indian-administered Kashmir that left 26 tourists dead.

New Delhi blamed Islamabad for the assault, an allegation Pakistani officials repeatedly denied.

Sharif said international financial institutions had “responsibly rejected” India’s narrative and reaffirmed their trust in Pakistan’s economic strategy.

“Indian efforts to sabotage the IMF program have failed,” he said, adding the disbursement would help stabilize the economy and steer it toward long-term recovery.

He praised Deputy Prime Minister and Foreign Minister Ishaq Dar, Finance Minister Muhammad Aurangzeb and other members of the government’s economic team for their role in securing the funds.

Pakistan has been working to broaden its tax base, improve energy sector efficiency, and unlock private sector growth as part of its reform commitments under the $7 billion IMF loan program.

“By the grace of God, the country’s economic situation is improving, and Pakistan is moving toward progress,” Sharif said. “The government remains committed to tax reforms, energy sector improvements and private sector development.”

He reiterated that Pakistan would stay the course on economic stabilization, effective performance and long-term planning.

The IMF funding approval comes at a critical time for Pakistan, as it seeks to reassure global investors and shore up foreign exchange reserves amid geopolitical instability and upcoming budget negotiations.

Topics: Pakistan IMF Talks Pakistan IMF

Pakistani stocks surge sharply on IMF optimism, hopes of easing India-Pakistan standoff

Updated 09 May 2025
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Pakistani stocks surge sharply on IMF optimism, hopes of easing India-Pakistan standoff

  • The benchmark KSE-100 index rose 3,647.82 points, or 3.52 percent, to close at 107,541.45
  • India-Pakistan tensions triggered about 12 percent market decline between April 23 and May 8
Updated 09 May 2025
Ismail Dilawar

KARACHI: The Pakistan Stock Exchange (PSX) rebounded sharply on Friday, climbing over 3,500 points, as investor sentiment improved ahead of an International Monetary Fund (IMF) Executive Board meeting and what some analysts described as easing tensions between Pakistan and India.

The benchmark KSE-100 index recovered 3,647.82 points, or 3.52 percent, closing at 107,541.45, after a historic plunge of 6,482 points on Thursday, the largest single-day drop in the index’s history, triggered by fears of an escalating conflict between the two nuclear-armed neighbors.

"The recovery was on account of optimism on IMF Executive Board meeting scheduled to consider Extended Fund Facility (EFF) program, where market expects smooth approval," Topline Market Review said after the end of trading. "Overall decline in cross border hostilities also provided stimulus to investor sentiment."

The EFF, a $7 billion loan program secured by Pakistan in September last year, is aimed at stabilizing the country's economy through structural reforms and fiscal consolidation.

While Pakistan’s authorities say macroeconomic indicators have improved in recent months, they view the IMF support as critical for sustaining gains and transitioning toward growth.

Some analysts also linked the improved investor confidence to what they described as a gradually easing geopolitical situation between India and Pakistan.

"Stocks staged sharp recovery as investor eye de-escalation in Pakistan-India tensions after US appeal for end to violence," Ahsan Mehanti, the Chief Executive Officer of Arif Habib Commodities, told Arab News.

Raza Jafri, the head of Intermarket Securities, said any de-escalation could extend the positive stock market trend.

"Institutional value buying, especially in blue-chip high dividend yielding stocks, saw the KSE100 rebound today," he added.

Tensions between India and Pakistan spiked this week after New Delhi launched missile strikes on multiple locations in Pakistan, blaming Islamabad for a deadly April 22 attack in Indian-administered Kashmir that killed 26 tourists. Pakistan has denied involvement.

The crisis triggered a 12 percent decline in the Pakistani market from April 23 to May 8.

The geopolitical unrest posed a major challenge for Prime Minister Shehbaz Sharif’s efforts to stabilize the economy, which depends on a number of factors including increased foreign investment, exports and revenue generation.

Topics: Pakistan Stock Exchange PSX IMF

Pakistan’s remittances hit record $31.2 billion in current fiscal year, led by Saudi inflows

Updated 09 May 2025
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Pakistan’s remittances hit record $31.2 billion in current fiscal year, led by Saudi inflows

  • PM Sharif praises overseas Pakistanis for supporting the country’s economic recovery
  • Central bank projects remittances to reach $38 billion by end of current fiscal year
Updated 09 May 2025
Ismail Dilawar

KARACHI: Prime Minister Shehbaz Sharif on Friday lauded the contribution of overseas Pakistanis as workers’ remittances surged to a record $31.2 billion during the first ten months of the current fiscal year, with Saudi Arabia emerging as the top source of inflows.

According to data released by the State Bank of Pakistan (SBP), remittances rose by 30.9 percent during July-April FY25 compared to $23.9 billion received in the same period last year.

In April alone, Pakistan received $3.2 billion, showing a 13.1 percent year-on-year increase. The inflows were mainly sourced from Saudi Arabia ($725.4 million), United Arab Emirates ($657.6 million), United Kingdom ($535.3 million) and the United States ($302.4 million).

“Prime Minister Shehbaz Sharif expressed satisfaction over a 31 percent increase in remittances during the first 10 months of fiscal year 2025 compared to the previous year,” a statement issued by his office said.

“Remittances reaching a record level is a reflection of the confidence of overseas Pakistanis in government policies,” it quoted him as saying.

Remittances form a vital pillar of Pakistan’s external sector, helping stabilize the current account, fueling domestic consumption and easing the country’s reliance on external borrowing.

Earlier this year, in March, the SBP recorded an all-time monthly high of $4.1 billion in remittance inflows, driven by seasonal factors and improved formal channel usage.

Pakistan has focused on boosting exports and remittances in recent years as part of broader efforts to strengthen its external sector and address economic vulnerabilities.

The central bank has also revised its FY25 remittance projection upward from $36 billion to $38 billion, citing current trends.
 

Topics: Pakistan Saudi Ties Pakistan economy

‘A revolution in the way people travel’ — Saudi aviation industry soaring with sky-high ambition

Updated 09 May 2025
Miguel Hadchity
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‘A revolution in the way people travel’ — Saudi aviation industry soaring with sky-high ambition

Updated 09 May 2025
Miguel Hadchity

RIYADH: Increased technology integration and greater connectivity over the next five years will see Saudi Arabia cement its position as a global aviation hub, experts have told Arab News.

In a comprehensive assessment of the Kingdom’s air sector, analysts and industry insiders have set out how investment in infrastructure, the roll out of new airlines, and a focus on sustainability will see Saudi Arabia reach its Vision 2030 goals.

The Kingdom is targeting handling 330 million passengers annually across 250 destinations by the end of the decade, as well as  transporting 4.5 million tonnes of cargo.

The industry laid the groundwork for this growth in 2024, achieving record-breaking results with the 94 million passengers transported representing  a 15 percent year-on-year increase, alongside a 10 percent rise in flight activity, and a 52 percent boost in air cargo, to reach nearly 1 million tonnes.

The International Air Transport Association’s Regional Vice President for Africa and the Middle East, Kamil Al-Awadhi told Arab News that the Kingdom is preparing for the aviation sector to play an even bigger role in its future. 

“Over the next five years, we expect continued development in digitalization and connectivity, and for Saudi Arabia to be in an even stronger position as a global hub, driving economic and social growth for the Kingdom,” he said.

Al-Awadhi also emphasized that the nation’s regulatory reforms and commitment to sustainability will be key factors in attracting international airline partnerships and investment. 

He added: “GACA’s (the General Authority of Civil Aviation) revision of its charging scheme, to make Saudi airports more competitive in the region, is a positive step, now and for the future. As is its establishment of an independent economic regulatory framework.”

The top official noted that Saudi Arabia is the first country in the Middle East and North Africa to do this, and encouraged others to follow.

Riyadh Air — a portal to the Kingdom

A key development in the sector is the highly anticipated debut of Riyadh Air, Saudi Arabia’s new full-service airline, set to launch in 2025. 

The company has made significant strides in preparation for its release, including major aircraft acquisitions, strategic alliances, and technological investments.

Mark Bothorn, principal of innovation practice at Arthur D. Little Middle East, highlighted that the launch of Riyadh Air is a “watershed moment for Saudi Arabia’s aviation sector — an event of this scale and significance happens perhaps once a decade.”

He added: “As a full-service national flag carrier, Riyadh Air will not only enhance domestic connectivity but also position the Kingdom’s capital as a major global aviation hub.”

Bothorn further anticipated that the new national carrier would serve as an ambassador for Saudi Arabia, embodying the nation’s vision through cutting-edge design, unparalleled guest experience, and world-class connectivity. “The way the world perceives Riyadh will, in many ways, be shaped by the experiences this airline delivers,” he added.

Mark Bothorn, principal of innovation practice at Arthur D. Little Middle East. Supplied

The airline has ordered 60 Airbus A321neo jets, with plans for additional wide-body aircraft this year. It has secured agreements with Singapore Airlines, Air China, and Delta Air Lines to enhance interline connectivity, codeshare operations, and frequent flyer benefits.

Riyadh Air is collaborating with Artefact to develop an advanced data analytics platform that aims to offer hyper-personalized services and seamless digital-first experiences. Its initial routes will connect Saudi Arabia to major cities in Europe, North America, and Asia, enhancing its international connectivity.

Riyadh Air plans to connect with more than 100 cities by 2030. Shutterstock

The Kingdom’s existing airlines are also undergoing significant transformations to cater to the growing demand and enhance international reach. 

Saudia has placed a historic $19 billion order for 105 Airbus A320neo aircraft to expand its fleet, set for delivery starting in 2026.

Additionally, the airline is enhancing its maintenance and repair capabilities through a partnership with Air France-KLM. Flyadeal, Saudia’s budget airline, aims to double its fleet to 100 aircraft by 2030, offering affordable travel options across domestic and regional routes.

Flynas, the region’s top low-cost airline, secured a 280-aircraft deal, including Airbus A320neo and A330neo models, to support its aggressive expansion strategy. The airline also introduced new routes connecting Saudi Arabia to Africa and Europe.

Bothorn commented on the impact of heightened market contenders, saying: “Increased competition is always a catalyst for innovation and improvement, and in Saudi Arabia’s aviation sector, it will lead to two transformative outcomes.”

First, enhanced connectivity will strengthen Riyadh’s position as a global business hub by providing seamless access to international markets through more flights and improved routing.

Second, Riyadh Air, unburdened by legacy systems, has the potential to redefine air travel, setting new benchmarks in passenger experience and efficiency, according to Bothorn.

Airport infrastructure soars 

To handle the volume that new airlines will be attracting, Saudi Arabia is investing heavily in airport infrastructure. 

King Salman International Airport in Riyadh is set to become one of the world’s largest airports, with ongoing developments led by global firms including Foster & Partners and Jacobs Engineering. The airport will increase its capacity to accommodate 120 million passengers by 2030.

King Khalid International Airport’s expansion includes upgrades to Terminals 1 and 2, increasing capacity to 14 million passengers annually. Saudia’s deal with German aerospace company Lilium NV will introduce 50 electric vertical takeoff and landing jets, making it the first airline in the region to invest in sustainable air travel.

Bothorn emphasized the impact of airport infrastructure advancements. “For many travelers, the airport experience is often the most stressful part of a journey — navigating terminals, dealing with security bottlenecks, and enduring long waits.”

He added: “A seamless integration between the airport and airlines can dramatically transform this, replacing frustration with efficiency and even moments of delight.”

Bothorn envisioned airports that proactively anticipate passenger needs, with real-time updates enabling travelers to relax in lounges or dine rather than wait at gates.

An impression of how King Salman International Airport will look when construction is completed. File

Investment turbines spin

Saudi Arabia’s business aviation sector is thriving, driven by an influx of high-net-worth individuals and economic expansion. The sector, valued at $1.2 billion in 2023, is expected to grow at an annual rate of 8.88 percent from 2025 to 2029.

GACA is further boosting this sector by removing restrictions on foreign on-demand charter flights, allowing international operators to enter the domestic private aviation market starting in May.

Infrastructure and transportation developments outlined in the 2025 Saudi budget report reinforce these aviation ambitions. The gross domestic product of the transportation and logistics sector grew by 6.4 percent in the first half of 2024.

Total investment contracts signed in this sector amounted to over SR200 billion ($53.3 billion). Saudi Arabia has also strengthened its global presence by securing key positions in international aviation organizations, including hosting the UNCTAD Global Supply Chain Forum in 2026 and chairing the Executive Council of the Arab Civil Aviation Organization.

To enhance aviation services, the Kingdom has looked to implement modern and eco-friendly transportation initiatives during the Hajj season, including self-driving taxis, smart delivery vehicles, and increased aircraft seat capacity for pilgrims. Performance-based operations and maintenance contracts have been executed to enhance asset management efficiency.

Plans for 2025 include SR42 billion allocated for the infrastructure and transportation sector, which will witness the launch of several travel lounges across international airports, licensing new national air carriers, and expanding public bus networks to improve intercity and regional connectivity.

Al-Awadhi of IATA further elaborated on the nation’s role in shaping global aviation policies. “Many countries in the region look to Saudi Arabia for developing their aviation sectors, so the Kingdom plays an important role in shaping regional policies.”

Recent work revamping economic regulation related to consumer protection, safety and security has been followed by other countries in the region, according to the top official.

“We’re stronger as an industry when standards are aligned, not just regionally but globally,” he added.

Private jets and Saudi Arabia’s aviation roadmap

Saudi Arabia has made developing the private aviation market a key part of its roadmap for the sector, with the charter and corporate jet segments being supported by infrastructure upgrades such as six new general aviation airports.

The sector’s growth aligns with Vision 2030’s diversification efforts, particularly in tourism and entertainment, with destinations like AlUla and the Red Sea International Airport, capable of handling 1 million tourists annually, driving demand. 

During 2024’s Future Aviation Forum, GACA unveiled a roadmap aimed at increasing the general aviation sector’s contribution to GDP, targeting a tenfold growth to reach $2 billion by 2030. The plan encompassed the business aircraft sector, including private charter flights and corporate aviation.

Sustainability is another focus, with GACA’s plan targeting net-zero emissions by 2060 through initiatives such as sustainable aviation fuel and AI-driven efficiency optimizations. However, challenges, including limited sustainable aviation fuel supply, remain. 

The International Air Transport Association’s Regional Vice President for Africa and the Middle East Kamil Al-Awadhi. Supplied

Sustainable skies ahead

IATA’s Al-Awadhi highlighted the recent deal between Red Sea Global and daa International to introduce sustainable aviation fuel at Red Sea International Airport as “a positive step for Saudi Arabia and the region” when it comes to developing a more ecologically friendly sector.

The 35 percent SAF blend, supplied by Arabian Petroleum Supply Co., reduces aircraft emissions by up to 35 percent per flight, aligning with RSG’s broader sustainability efforts, including 400 megawatt-peak of solar installations and plans to plant 50 million mangroves by 2030.

The airport, operational from 2023 and with international flights beginning in 2024, serves the growing Red Sea destination, set to feature 50 resorts by 2030.

The next five years will bring transformative benefits for travelers flying to and from Saudi Arabia. Expanded airline networks will improve connectivity, reduce layovers, and increase travel convenience.

The rise of low-cost carriers like flyadeal and flynas means more budget-friendly flights for domestic and international routes. AI-driven services, biometric security checks, and world-class airport infrastructure will streamline travel, making it more efficient and comfortable.

“Expect nothing short of a revolution in the way people travel,” Bothorn said. He explained that long queues at security and immigration, endless gate waits, and the anxiety of either rushing through the airport or arriving far too early “will become relics of the past.” He projected air travel to become more intuitive and enjoyable.

Al-Awadhi added that Saudi Arabia is investing heavily in digital processing of passengers and integrating latest technologies at airports. 

“We can certainly expect better passenger experience and customer service,” he said, adding: “Airlines are also updating their fleets so travelers will be flying on the latest aircrafts, enjoying what new technologies have to offer. Improved connectivity will provide travelers with more choices, enhancing the overall customer experience.”

Investments in eVTOL aircraft and eco-friendly practices signal a shift toward greener aviation. Saudi Arabia is undergoing a historic transformation in its aviation sector, with massive investments, strategic expansions, and cutting-edge innovations that will redefine the travel experience.

By 2030, the Kingdom aims to be a premier global aviation hub, offering world-class connectivity, seamless air travel, and state-of-the-art airport facilities.

Topics: aviation Saudi aviation Riyadh Air

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