Wizz Air aspires to become part of Saudi aviation’s success story

Last year, Wizz Air forged partnerships with Saudi Arabia’s tourism and investment ministries and the General Authority of Civil Aviation to strengthen its operations in the Kingdom. (Supplied)
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Updated 11 June 2023
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Wizz Air aspires to become part of Saudi aviation’s success story

  • Multinational airlines plans expansion to boost tourism in KSA, president tells Arab News

RIYADH: With its tourism sector growing by leaps and bounds, Saudi Arabia is also witnessing the entry of major international aviation players keen to capitalize on the opportunities the Kingdom’s travel market has to offer. Wizz Air, a multinational airline, is among the frontrunners that have made substantial investments to boost its operations in the Kingdom.
The airline’s president, Robert Carey, told Arab News that the company’s debut in Saudi Arabia represented its “fastest ramp-up” ever achieved in a single market.
The official explained that out of the total fleet of 185 “we have around 10 aircraft operating in the Kingdom, representing about 7 percent of our total capacity.”
Carey said the number of passengers is growing quite favorably, accompanied by positive feedback, and there is still ample room to enhance the airline’s fare structure.
“When we get to full-scale operations, we will have about 1 million seats from and to Saudi Arabia this summer,” he told Arab News.
The airline’s chief elaborated that a standard full-scale operation usually spans about three years, the first being an investment year, followed by a breakeven point and finally growth. However, in Saudi Arabia, certain aspects are progressing more swiftly than usual, he added.




Wizz Air operates at a 30 percent lower cost than any other competitor in the region, says the airline's president, Robert Carey. (Supplied)

Having already established operations in four cities, the company has secured its foothold in the Saudi market and plans to broaden its services.
“We serve four cities in Saudi Arabia — Dammam, Riyadh, Jeddah, and Madinah. We also see potential in other cities such as Taif and Tabuk. We’re going to start exploring those cities. We think there are some natural connection points there,” Carey said.
He said the airline is also in the process of submitting a proposal to establish a base in Dammam.
Wizz Air is known for its ultra-low fares, providing customers with an accessible price point that invites a broader range of travelers.
Carey said if the company succeeded in securing the Dammam bid, it could leverage its strategic advantage within the Saudi market.
“We’re hopeful that we will be selected. I think we can bring a lot to the Kingdom if we are selected. We can bring a new price point,” Carey said.
He said the airline operates at a “30 percent lower cost than any other competitor” in the region. “That allows us to introduce flying to new passengers who don’t otherwise have a choice. We fly full flights with very high satisfaction rates.”
The airline aspires to stimulate the Kingdom’s aviation sector by linking Saudi Arabia not only with Europe but also with other regions such as Africa and Central Asia.
“We want to connect them to and from Saudi Arabia. We also want to tackle domestic travel in the Kingdom to introduce a new price point,” Carey said.
The company is collaborating intensively with various Saudi entities to increase its presence in the Kingdom.
Last year, Wizz Air forged partnerships with Saudi Arabia’s tourism and investment ministries and the General Authority of Civil Aviation to strengthen its operations in the Kingdom.
Carey lauded the Investment Ministry for its cooperation in identifying potential investment partners.
“We want to come in, we have the expertise in operating an airline, but we want to be a Saudi airline which requires a Saudi partner,” he added.
“The Tourism Ministry has also been a valuable partner. We’re doing a lot together with the Saudi Tourism Authority, and the Air Connectivity Program to identify those markets that show growth potential and how can we bring new services and stimulate new lines,” he added.
Carey said the airline is focused on ways to boost the volume of inbound tourism by increasing collaboration with the local authorities to maximize benefits for the Saudi travel and tourism sector.
“We’re serving a different market and we’re very happy that there are lots of other players in the market today. They serve a different market. They serve connecting traffic. We do all point to point. We’re focused on bringing customers to the Kingdom,” he said.
Carey was optimistic that following a successful bid for a base in Dammam, the airline would expand further using it as its launching point.
Responding to Arab News’ question about Wizz Air’s focus on bringing tourists to the Kingdom, he said being a low-cost airline “we create markets from scratch” and Saudi Arabia has “great natural sites and a lot of tourism potential.”
Carey said the company is dedicated to helping the Kingdom achieve its Vision 2030 objectives, which include attracting 100 million visitors by 2030.
The company has also demonstrated a keen interest in addressing global environmental concerns by setting sustainability goals.
Carey compared achieving sustainability goals to running a marathon. He said: “Just as we need to train and run daily to prepare for a marathon, similarly consistent efforts are required to reach sustainability objectives.”
He added that Wizz Air boasts one of the most environmentally friendly and youngest fleets in the industry, with an average aircraft age of four years.
“We have ambitions like everybody else and we believe in those ambitions. But what we want to do is we want to invest everything we can now to make sure we’re being the good citizen,” the official said.
He said: “More than half of our fleet is now the A321neo, which is the most sustainable aircraft out there.”
Carey emphasized that if all European airlines adopted the same fleet and operational model as Wizz Air, carbon emissions would decrease by one-third overnight.


Oil creeps back up after three days of losses

Updated 23 May 2024
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Oil creeps back up after three days of losses

Oil prices crept up on Thursday, clawing back some of the previous three days’ losses.

The gains were made despite the US Federal Reserve entertaining a further tightening of interest rates if inflation remains sticky, a move that could hurt oil demand.
Brent crude futures were up 92 cents, or 1.1 percent, at $82.82 a barrel by 1317 GMT. US West Texas Intermediate crude futures were 97 cents, or 1.3 percent, higher at $78.54. Both benchmarks fell more than 1 percent on Wednesday for their third straight day of losses.

Saudi crude exports
Saudi Arabia’s crude exports reached 6.41 million barrels per day in March, according to an analysis from the Joint Organizations Data Initiative.
This figure increased by 96,000 bpd, or 1.52 percent, compared to the previous month, marking a nine-month high. Furthermore, the data indicated that the Kingdom’s crude production fell to 8.97 million bpd, reflecting a monthly decrease of 0.42 percent.
This can be linked to the voluntary oil production cuts adopted by members of the Organization of the Petroleum Exporting Countries and their allies, known as OPEC+. Saudi Arabia announced in March the extension of its 1 million bpd cut, initially implemented in July 2023, until the end of the second quarter of 2024.
The Ministry of Energy said that the Kingdom’s production will be approximately 9 million bpd until the end of June.
Meanwhile, refinery crude output, representing the processed volume of crude oil yielding gasoline, diesel, jet fuel, and heating oil, fell by 4 percent compared to the previous month, reaching 2.56 million bpd, according to JODI data.

 

 


IMF demands Pakistan secure parliamentary approval on reforms for loan agreement— official

Updated 23 May 2024
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IMF demands Pakistan secure parliamentary approval on reforms for loan agreement— official

  • Government will present “prior actions” needed to secure IMF loan in federal budget next month, says finance ministry official 
  • Leading economist says Pakistan left with no option but to secure IMF bailout to meet external financing needs of $80 billion 

ISLAMABAD: The International Monetary Fund (IMF) has asked Pakistan to seek parliamentary approval on major economic reforms related to the energy, power, tax sectors and on the privatization of state-owned enterprises (SOEs) before starting formal talks for another loan program, a finance ministry official said on Thursday. 

Facing low foreign exchange reserves, currency devaluation and high inflation, Pakistan last month completed a short-term $3 billion IMF program that helped stave off a sovereign default. However, the government of Prime Minister Shehbaz Sharif has stressed the need for a fresh, longer-term program with the global lender. 

An IMF mission reached Islamabad last week to negotiate with Pakistani authorities for a fresh bailout program, holding talks with officials on reforms in key economic sectors. The mission is wrapping up its visit today, Thursday, without reaching any staff-level agreement with Islamabad. 

The government would present the economic reforms demanded by IMF or “prior actions” in parliament in the Finance Bill 2024-25 likely to be presented on June 7, the finance ministry official with knowledge of the negotiations, said on condition of anonymity. 

“The IMF has suggested authorities to get parliamentary approval for the new loan program’s targets and conditions before initiation of the formal talks,” the official told Arab News. 

“In fact, these are the prior actions that Pakistan is required to take care of before reaching a staff-level agreement with the Fund for the new bailout package.”

The international lender has urged Islamabad to overhaul its SOEs and introduce tax, energy and power reforms. Pakistan has had to take painful measures in line with the IMF’s demands since 2022, which included hiking fuel and food prices. 

The finance ministry official said the government intends to introduce key reforms in the energy and power sectors in line with the IMF’s demands, besides broadening the tax base through progressive initiatives. 

“The government will take all parliamentary parties into confidence over the digitalization of the Federal Board of Revenue and the privatization of the SOEs,” he added. 

Sajid Amin, a senior economist and deputy executive director at the Sustainable Development Policy Institute (SDPI), said the government had “no option but to secure the IMF loan program.” He said the IMF’s program was critical in helping Pakistan meet its external financing needs of around $80 billion in the next three years. 

“The IMF wants political ownership of the loan program and that’s why it is pushing the government to get all the targets and conditions approved by the parliament,” Amin told Arab News.

“The biggest challenge for the government is to convince the coalition partners and opposition over its reforms agenda to secure the IMF loan,” he said. 

Amin warned the upcoming IMF program would be the “toughest” one for the government as it would not be easy for it to complete it. 
 


Goldman Sachs to establish regional headquarters in Riyadh: report

Updated 23 May 2024
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Goldman Sachs to establish regional headquarters in Riyadh: report

RIYADH: Goldman Sachs Group is set to become the first Wall Street bank to establish its regional headquarters in Saudi Arabia as it has reportedly obtained a license from the Ministry of Investment, reported Bloomberg.

As per the recently approved laws in Saudi Arabia, companies with state contracts must have a regional headquarters in the Kingdom with a minimum of 15 employees.

Arab News contacted the Investment Ministry to get a confirmation of the news but officials declined to comment.

It would be pertinent to mention here that Goldman Sachs currently has offices in Doha, Riyadh and Dubai.

Saudi Arabia has outperformed its target for attracting regional headquarters, with over 180 companies now established in the Kingdom. This number surpassed the initial goal of securing 160 HQs by the end 2023.

Saudi Arabia offers tax incentives for foreign companies that locate their regional headquarters in the Kingdom, including a 30-year exemption for corporate income tax.

The tax incentives include zero income tax for foreign entities that move their regional headquarters in the Kingdom, and these benefits can be availed from the date of the regional headquarters issuance license, according to Ministry of Investment. 


Saudi Arabia issues 54 industrial licenses in March 

Updated 23 May 2024
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Saudi Arabia issues 54 industrial licenses in March 

RIYADH: Saudi Arabia maintained the issuance of over 300 industrial licenses in the first quarter of 2024, consistent with the previous year, official data has revealed.

According to a statement released from the Kingdom’s Ministry of Industry and Mineral Resources, as many as 324 industrial permits were issued in the first three months of the year, with 54 approvals issued in March alone. 

The report further showed that the volume of investments in March amounted to SR1.047 billion ($279 million). 

This falls in line with the Saudi Arabia’s ambition to transform mining into a foundational industrial pillar of the country’s economy. 

It also aligns with the ministry’s goal to strengthen the sector as well as contribute to the ongoing developments in accordance with Vision 2030.

Moreover, the report, which was issued by the ministry’s National Industrial and Mining Information Center, disclosed that the permits in March were distributed across several sectors, including the manufacturing of non-metallic mineral and food products and formed metal goods as well as chemicals and paper and its products. 

According to the analysis, the new industrial licenses were distributed among multiple regions, including the Eastern Province, Riyadh and Makkah, as well as Qassim, Jazan, Madinah, Al-Jouf, and Al-Baha. 

The distribution of new permits shows that small enterprises comprised 77.78 percent, with medium-sized companies following at 22.22 percent. 

In terms of the type of investments, national factories accounted for the largest percentage of the total licenses, with 98.15 percent, followed by foreign establishments with 1.85 percent. 

Furthermore, the study also indicated that the number of factories existing and under construction in the Kingdom until the end of the same month reached 11,832 factories, up from 11,757 facilities in February, with an investment volume of SR1.528 trillion.

Meanwhile, 69 factories started production in March, with an investment volume of SR1.339 billion.

The ministry issues its report monthly to establish the sector’s most critical indicators in Saudi Arabia, demonstrating the extent of change and the growth of industrial investments. 

In April, the Kingdom introduced the Mining Exploration Enablement Program, inviting global firms and explorers to participate in the initiative in an attempt to further expand the sector.

According to a statement at the time, Saudi Arabia’s Ministry of Industry and Mineral Resources and the Ministry of Investment extended invitations to international companies in the sector to register for the scheme. 

The statement further added at the time that the program is expected to boost exploration activities, optimize the value extracted from the mining sector, and expand the Kingdom’s survey potential by focusing on uncharted territories.  


Saudi Arabia to reshape global tourism landscape, says Al-Khateeb 

Updated 23 May 2024
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Saudi Arabia to reshape global tourism landscape, says Al-Khateeb 

RIYADH: Saudi Arabia is on track to change the map of tourism on a global level, according to a top minister.  

Participating in a dialogue session on the sidelines of the 50th UN Tourism Regional Commission for the Middle East taking place from May 22 to 24 in Muscat, Saudi Tourism Minister Ahmed Al-Khateeb stressed that the Kingdom is working in cooperation with regional member states of the organization to further develop the industry, according to the Saudi Press Agency. 

This is in line with Saudi Arabia’s National Tourism Strategy, which aims to reach 150 million visitors by 2030, grow the private sector’s contribution, and attract direct foreign investments, adding to the economic growth and diversification. 

“The Kingdom will change the map of tourism in the world, and the opportunities and facilities that we provide to investors will make the tourism sector more attractive, and we are proceeding in a distinctive way in building the sector,” Al-Khateeb affirmed. 

During the session, the minister also indicated that Saudi Arabia has begun to develop the tourism division as part of its Vision 2030 plan, noting that the development efforts have succeeded in raising the sector’s contribution from 3 percent of the local economy to 4.5 percent by the end of the last year.  

Al-Khateeb also drew attention to the fact that the Middle East has great potential and natural resources that enable it to become one of the most important tourist destinations in the world.  

He explained that the countries in the region are moving as a single bloc in the right direction regarding developing the tourism sector, as they have begun designing plans and strategies to benefit from this promising industry.  

The minister highlighted that attracting and qualifying the national human resources are two important factors for developing the regional sector, stressing that the Saudi Ministry of Tourism pays great attention to the issue of qualifying national cadres working in the field. 

The body also works to attract young men and women in the Kingdom to work in the industry. 

In April, the deputy minister of destination enablement at the Ministry of Tourism said that Saudi Arabia is open to readjusting its goal of attracting 150 million visitors by 2030 if those numbers are achieved ahead of time.  

Speaking in an interview with Arab News on the sidelines of the first day of the Future Hospitality Summit in Riyadh, Mahmoud Abdulhadi explained that goals are adjusted based on performance.    

“As we hit our target seven years ahead of target, our 100 million target, we therefore now have a new goal. I’m sure if we were to hit that new target with a significant overperformance in terms of the timeline, our targets would also be adjusted,” Abdulhadi said.