Riyadh’s new carrier risks lower demand and higher costs after Iran’s recent airspace restrictions and security concerns.
Saudi Arabia’s newest airline, Riyadh Air, is set to begin operations next year amid heightened regional tensions. Iran’s recent airspace restrictions and security warnings have forced rerouting of flights, increasing fuel costs and travel times for Middle Eastern carriers.
The airline, backed by Saudi Arabia’s Public Investment Fund, aims to compete with Emirates and Qatar Airways. Analysts had projected strong demand from religious tourism and business travel, but the geopolitical climate may dampen growth forecasts.
Shares of regional aviation firms dipped slightly on news of the disruptions, though Riyadh Air remains privately held and has not disclosed financial targets.