PIF invests in Saudia Technic to create national aviation maintenance ‘champion’
Saudi Arabia’s Public Investment Fund signed an agreement to invest in aviation services company Saudia Technic, a subsidiary of aviation major Saudia Group, as the kingdom seeks to boost non-oil income and diversify its economy away from hydrocarbons.
Saudia Technic, formerly known as Saudia Aerospace Engineering Industries, provides services across aviation maintenance, repair and overhaul (MRO) segments, including line, base, components and engines, the PIF said.
The fund and Saudia Group will transform Saudia Technic into a “national MRO champion” by investing in infrastructure, improving efficiency and capturing market growth in Saudi Arabia over the next decade, the statement added.
The value of the investment was not disclosed.
“The investment in Saudia Technic is a significant milestone as we unlock capabilities, localise expertise and create a first-class, world-leading aviation sector in Saudi Arabia,” Raid Ismail, co-head of Middle East and North Africa direct investments at PIF, said.
Saudi Arabia aims to diversify its economy away from oil as part of the kingdom’s Vision 2030 initiative.
Its PIF is one of the world’s largest sovereign wealth funds, with about $620 billion in assets under management.
The deal is in line with the PIF’s wider strategy to develop 13 sectors as part of the kingdom’s diversification strategy.
The fund has been involved in a variety of projects in sectors including aviation, tourism, sports, gaming, dairy, pharmaceuticals and automotive.
Saudia Technic’s ambition is to become the “MRO of choice” for domestic airlines and global partners seeking access to the Saudi market, the PIF said.
The investment will support the development of an approximately 1 million-square-metre MRO village in Jeddah, including a jet propulsion centre, it added.
The village will increase hangar capacity and the number of component shops.
It will include the construction and operationalisation of an engine test cell that will serve next generation widebody and narrow-body aircraft engines, according to the wealth fund.
“Together with the PIF, we aim to enhance our capabilities, drive innovation and become the MRO of choice for airlines and partners worldwide,” Fahd Cynndy, chief executive of Saudia Technic, said.
Saudi Arabia, the Arab world’s largest economy, is seeking to attract more tourists and develop the country’s aviation sector, increasing its contribution to non-oil gross domestic product.
The Saudi Aviation Strategy seeks to triple annual passenger traffic to 330 million by 2030 and boost the number of destinations to 250 from 99.
This strategy is backed by $100 billion in government and private sector investment.
The PIF has already made significant investments in the aviation sector. These include plans for King Salman International Airport in Riyadh, which is intended to have capacity for 120 million travellers by the end of the decade.