‘Win-win’ deal hailed by aviation industry

A move to restore direct flights between Saudi Arabia and Iran could expand their airlines’ networks, stimulate tourism, enable trade and support the kingdom’s aviation ambitions, analysts said.

The decision is a positive step for the travel markets in both countries, aviation industry analysts said.

The plans are “an extremely positive development and a win-win for both countries”, John Grant, senior analyst at travel data firm OAG, said.

“It will once again allow Saudi-registered aircraft to [fly over] Iranian air space, which will open up new markets to points in Central Asia that were previously prohibitive to operate. At the same time, it will provide the Iranian government with hard currencies such as US dollars for those overflights.”

Saudi Arabia wants to be a global transport and logistics hub and to promote itself as a tourism destination.

In March, it launched a new airline, Riyadh Air, as it seeks to attract tourists and diversify its economy away from oil.

The Saudi Aviation Strategy calls for tripling annual passenger traffic to 330 million by 2030, boosting the number of destinations to 250 from 99 and establishing the new flag carrier.

Easing travel with Iran could also open up another new market for Riyadh Air to develop its regional connectivity, Mr Grant said.

Besides Riyadh Air, Saudi Arabia is also launching Neom Airlines, which will be based in the planned $500 billion futuristic mega-city after which it is named. The kingdom is also home to national carrier Saudia and low-cost subsidiary flyadeal.