UAE: Air Arabia wins bid to launch Saudi low-cost airline in Dammam, boosting Vision 2030 goals

TL;DR

• Air Arabia , based in the UAE, will lead a new Saudi low-cost airline.
• The airline will be based in Dammam and fly to 81 destinations.
• It’s part of Saudi Arabia’s wider aviation push under Vision 2030.

On July 20, 2025, Saudi Arabia’s General Authority of Civil Aviation (GACA) announced that an alliance led by Air Arabia, along with Saudi firms Kun Investment Holding and Nesma Group, has secured the license to operate a new national low-cost airline based at King Fahd International Airport in Dammam.

This new airline will launch with a fleet of 45 aircraft, connecting 24 cities across Saudi Arabia and flying to 57 international destinations. By 2030, the carrier aims to serve around 10 million passengers each year and create over 2,400 new jobs.

According to Saudi officials, the airline will help boost competition, increase seat capacity, and offer more affordable travel options to the public, especially in the country’s Eastern Region.

About Air Arabia and Its Role in Saudi Arabia

Air Arabia is a low-cost airline based in Sharjah, UAE. Launched in 2003, it was the first budget carrier in the Middle East. Today, it operates a fleet of about 60 Airbus A320s and flies to over 170 destinations across 30+ countries, including cities in the Middle East, North Africa, Asia, and Europe. The airline is known for offering affordable fares and simple, no-frills service.

Until now, Air Arabia’s presence in Saudi Arabia was limited to international flights, connecting cities like Riyadh, Jeddah, and Dammam to its wider network. Dammam, for example, was just a destination.

That’s changing. With the launch of the new Saudi low-cost airline, Dammam becomes the airline’s home base in the Kingdom. This is the first time Air Arabia is co-operating a Saudi-licensed carrier, and it turns Dammam into a full-fledged hub, not just a stop on a route. For travelers in the Eastern Province, it means more direct flights, better access, and lower fares.


A Closer Look at the Alliance
The license was awarded to a three-member consortium:

Air Arabia (UAE): One of the region’s top low-cost carriers, with extensive experience in budget operations and regional connectivity.

Kun Investment Holding (Saudi): A Saudi firm bringing capital and strategic local partnerships.

Nesma Group (Saudi): A diversified Saudi business with experience in aviation and infrastructure through its former airline operations.

Unlike foreign players operating independently in Saudi skies, this is a Saudi-licensed airline backed by a regional partnership, blending international experience with local roots.

Why Dammam? A Strategic Shift
Dammam hasn’t traditionally been the center of Saudi aviation. Most growth has centered on Riyadh and Jeddah. This move signals a change. By basing the new airline in Dammam, the alliance is tapping into a region that’s economically vital but often underserved by direct air links. The plan includes:

• Improving connectivity for Eastern Province residents
• Expanding domestic and regional options
• Supporting tourism and business travel in and out of Dammam

This also helps reduce pressure on larger airports and supports Saudi Arabia’s goal of creating multiple air travel hubs, not just one or two dominant centers.

Key Details:

• Fleet size: 45 aircraft
• Network: 24 domestic and 57 international destinations
• Passenger goal: ~10 million annually by 2030
• Jobs created: Over 2,400
• Main focus: Improve connectivity in the Eastern Region, expand seat capacity, and offer more affordable fares

How This Fits into Vision 2030
Saudi Arabia is betting big on aviation as part of Vision 2030, its long-term strategy to diversify the economy beyond oil. The country aims to:

• Attract $100 billion in aviation investment
• Serve over 330 million passengers annually
• Connect to 250+ global destinations
• Boost the contribution of aviation to GDP
• Liberalize airport and airline operations to allow new entrants

This new airline aligns with that effort. It’s not meant to compete with flagship brands like Riyadh Air, which focuses on premium long-haul routes. Instead, it adds depth, filling a gap in affordable, short- and mid-range travel and extending access to more travelers.

What This Means: Positive Outcomes

• More Travel Options: Travelers get more destinations, especially from Dammam
• Lower Fares: A low-cost model means increased competition and more pricing flexibility
• Job Growth: More than 2,400 direct jobs expected
• Network Expansion: 81 destinations, including key domestic and regional cities
• Regional Boost: Supports development in the Eastern Province

Officials from Saudi Arabia’s Ministry of Transport and Logistic Services have indicated that the new airline is expected to increase market competition and offer travelers more choices, supporting the country’s broader aviation strategy.

FAQs

• Q1. Who will run the new airline in Saudi Arabia?

The airline will be operated by an alliance led by UAE’s Air Arabia, with Saudi-based Kun Investment Holding and Nesma Group as partners. The license was granted by GACA.

• Q2. Why was Dammam chosen as the base?

Dammam offers untapped potential. It’s a growing economic region with room to expand air traffic. Placing the airline there supports regional development and eases pressure on Riyadh and Jeddah.

• Q3. How will this airline be different from others like Flyadeal or Riyadh Air?

Flyadeal focuses on domestic routes under Saudia. Riyadh Air targets long-haul premium travel. This new airline offers low-cost, regional connectivity, especially from Eastern Saudi Arabia.