Hungary's budget airline Wizz Air is launching 20 new routes from Europe to Saudi Arabia as part of the kingdom's push to grow its tourism industry, improve air connectivity and develop its non-oil sectors.
The airline will operate flights from Hungary's capital Budapest; Romania's capital Bucharest; Italy's capital Rome, as well as the cities of Catania, Milan, Naples and Venice; Larnaca in Cyprus; Bulgaria's capital Sofia; Albania's capital Tirana; and Austrian capital Vienna to Saudi capital Riyadh and the cities of Jeddah and Dammam, it said on Thursday.
Fares will be from €54.99 ($55), Wizz Air said.
The first flights are scheduled for December, with the Vienna-Jeddah route starting on December 13.
More flights will be added through to July 2023, the airline said.
The Wizz Air expansion is expected to bring more than one million additional travellers into Saudi Arabia next year, it said.
“This is the single biggest commercial announcement we've ever made in the history of this airline. It also makes a lot of sense for the country that is in transition to transform its airline industry to get into gear for tourism,” Jozsef Varadi, chief executive of Wizz Air, told The National following the announcement.
“We think Saudi Arabia is on the move, it represents significant opportunities for the airline industry and we want to make sure we benefit from being the first mover in the market.”
The announcement comes amid Saudi Arabia's plans to triple the country’s air passenger traffic by 2030, introduce 250 direct destinations and establish a new flag carrier as part of an aviation strategy aimed at diversifying its economy away from oil.
In May, Wizz Air signed a preliminary agreement with Saudi Arabia's Ministry of Investment to explore opportunities to develop the kingdom's aviation market.
Wizz Air is considering establishing an airline in the kingdom as part of this pact, Mr Varadi said.
“When we discussed Wizz Air's involvement in Saudi aviation with the government, we didn't stop at exploring only inbound flying opportunities, but also basing ourselves in the country,” he said.
“The first and foremost process is to find the right partnership with local investors and this is what we're working on. Once this gets sorted, then we can complete the formal process of an airline application.”
Wizz Air Abu Dhabi, a joint venture between the Hungarian airline and Abu Dhabi state holding company ADQ, has an Air Operator's Certificate (AOC) from the UAE.
Mr Varadi said he expects the low cost of flights and the new air connections between Europe and Saudi Arabia will stimulate demand from both sides.
The Saudi tourism market is “understated and misperceived in the world, it has a lot of attractions and we want to make sure to create the infrastructure to manifest those opportunities”, he said.
The launch of new international routes with Wizz Air's flights is “only the beginning and there's more to come”, Mohammed Alkhuraisi, vice president of strategy at the kingdom's General Authority for Civil Aviation (Gaca), said in an interview.
“We won't stop here. We have to move from 99 destinations to 250 by 2030, so we have to add 15 new destinations annually,” he told The National.
“It won't always be equal distribution but it gives an ideal of the scale of connectivity boost.
“We have other targets in North America, South America, Asia and Africa, so there's a long way to go.”
Asked about the process and timeline of granting Wizz Air an AOC, the Gaca official said that Saudi Arabia's aviation market is “wide open” and that there is a process to issue an airline licence. Private sector players are welcome to apply, he said.
The kingdom has added more than 80 new international routes this year, including those announced by Wizz Air, Gaca said.
Saudi officials said the priority is to provide more options for travellers.
“We are making it easier than ever to get to Saudi Arabia and are confident that increased travel options and competitiveness will expand consumer choice and drive down costs,” Fahd Hamidaddin, chief executive and board member of the Saudi Tourism Authority, said in the statement.
The Hungarian airline's expansion into the kingdom is “a real first for Wizz Air and for Saudi Arabia, and opens a new and affordable gateway for visitors from Europe”, Mr Hamidaddin said.
Saudi Arabia's travel and tourism sector will grow an average of 11 per cent annually over the next decade, making it the Middle East's fastest growing market, the World Travel and Tourism Council industry forum said in July.
Bullish Mena outlook
The overall outlook for the Middle East and North Africa is strong, Mr Varadi said.
Wizz Air is “excited” about the region, which has a young demographic, robust GDP growth and plans for economic diversification.
“Tourism will be at the forefront of the diversification strategies and that's where we come in,” he said.
Air travel demand may cause the industry to come under pressure in a “recessionary environment” and high inflation rates as consumer spending drops, but Wizz Air's low-cost model will benefit the airline as travellers opt for cheaper flights, he said.
High air fares seen over the summer season will drop in the autumn and winter, though not as low as pre-pandemic levels because airlines' costs remain high, he added.
The airline is currently operating at 130 per cent capacity, compared with pre-pandemic levels.
Supply chain issues plaguing the industry — such as jet delivery delays from plane makers and a shortage in aviation workers — will start to ease by next year, Mr Varadi said.