UAE: Air Arabia Wins Bid To Launch Saudi Low-cost Airline

Air Arabia, in collaboration with the firms of Saudi Arabia. It has secured a license to launch a new low-cost airline based in Dammam, Saudi Arabia. This initiative, part of Saudi Vision 2030, aims to enhance regional connectivity by serving 81 destinations with a fleet of 45 aircraft.

Air Arabia, based in the UAE, will launch 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 broader aviation push under Vision 2030.

On July 20 2025, Saudi Arabia's General Authority of Civil Aviation 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 2400 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.

Air Arabia is a low-cost airline that is based in Sharjah, UAE. Launched in 2003, it was he first budget carrier in the Middle East. Today, it operates a fleet of about 60 Airbus A320 and flies to over 170 destinations across more than 30 countries, including cities in the Middle East, North Africa, 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 ot its wider network. Dammam, for example, was just a destination.

That changing. With the launch of the new Saudi low-cost airline, Dammama becomes the airline's home base in the Kingdom. This marks Air Arabia's first cooperation with a Saudi-licensed carrier, transforming Dammam into a full-fledged hub rather than just a stop on a route. For travellers in the Eastern Province, it means more direct flights, better access and lower fares.

 The license was awarded to a three-member consortium:

 Air Arabia- 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. Dammam has traditionally been the centre of Saudi aviation. Most growth has centred on Riyadh and Jeddah. This move signals a change.

By launching and putting the new airline in Dammam. The alliance is tapping into a country that is 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 centres.

• Fleet size- 45 aircraft
• Network- 24 domestic and 57 international destinations
• Passenger goal- 10 million annually by 2030
• Jobs created- Over 2400
• Primary focus: Improve connectivity in the Eastern region, expand seat capacity and offer more affordable fares.

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 300 million passengers annually

Connect to 250+ global destinations

Boost the contributions of aviation to GDP

Liberalise 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 travellers.

• More Travel Options-Travellers get more destinations, especially from Dammam.
• Lower Fares:A low-cost model means increased competition and more pricing flexibility.
• Job Growth- More than 2400 direct jobs expected
• Network Expansion- 81 destinations, including key domestic and regional cities
• Regional Boost: Supports developments in the Eastern province.

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

 FAQs

 Who will run the new airline in Saudi Arabia?

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

2. 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 supports regional developments and eases pressure on Riyadh and Jeddah.

3. 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, mainly from eastern Saudi Arabia.

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