Riyadh Air Secures $1.3 Billion Financing Through Emirates NBD Partnership

In a landmark deal that underscores Saudi Arabia’s growing ambitions in the global aviation sector, Riyadh Air, the Kingdom’s newest national airline, has secured a SAR 5 billion ($1.3 billion) Islamic revolving credit facility (RCF). The financing, led in collaboration with seven financial institutions, will provide the resources needed for Riyadh Air’s operational launch, fleet expansion, and infrastructure development.

This deal represents a major step forward in the Kingdom’s drive to establish Riyadh as a global transportation and trade hub. It aligns seamlessly with the economic diversification objectives outlined in Vision 2030.

Riyadh Air

Launched in 2023, Riyadh Air is fully owned by the Public Investment Fund (PIF), Saudi Arabia’s sovereign wealth fund, which manages assets worth over $620 billion. Riyadh Air is not just a national carrier—it is a cornerstone of Saudi Arabia’s strategy to diversify its economy and reduce its dependence on oil revenues.

Saudi Vision 2030, unveiled in 2016, is a blueprint for transforming the Kingdom into a global economic powerhouse. Central to this plan is the growth of tourism, transportation, and trade sectors, and Riyadh Air has been tasked with playing a pivotal role.

• Connectivity: Riyadh Air aims to connect Saudi Arabia to over 100 destinations by 2030, creating a network that supports international business and tourism.
• Tourism: The airline will contribute to Saudi Arabia’s goal of attracting 100 million tourists annually by the decade’s end.
• Jobs: Riyadh Air’s expansion is expected to generate thousands of jobs in aviation, tourism, and related sectors.

The Financing Deal

The SAR 5 billion revolving credit facility, structured in alignment with Sharia principles, provides Riyadh Air with flexible access to capital. This funding is critical for its growth, enabling the airline to:

1. A cutting-edge fleet: Riyadh Air plans to purchase next-generation aircraft to ensure fuel efficiency and passenger comfort.
2. Build infrastructure: Investments will be directed towards building world-class facilities, including hubs at King Salman International Airport in Riyadh.
3. Operational readiness: The financing ensures Riyadh Air has the working capital needed for seamless operations.

The revolving credit facility is structured as an Islamic RCF, adhering to Sharia finance principles. Unlike traditional loans, Islamic financing prohibits the charging of interest and emphasizes fairness, transparency, and shared risk.

This structure aligns with the values of Riyadh Air and Emirates NBD, reflecting their commitment to ethical and responsible growth. Islamic financial instruments are increasingly popular in the Middle East and globally, with the Islamic finance market projected to reach $3.69 trillion by 2024.

Key Players Speak

Naser Yousef, CEO of Emirates NBD

“We are honored to partner with Riyadh Air on this transformative initiative. This financing is more than just a deal—it’s a testament to our commitment to supporting Saudi Vision 2030 and the Kingdom’s economic transformation. The aviation sector is a crucial pillar of this vision, and we are proud to be part of its journey.”

Ahmed Alghamdi, Head of Corporate Banking at Emirates NBD

“This deal is a significant milestone for Riyadh Air as it establishes its footprint in the financial markets. Emirates NBD is dedicated to providing bespoke financing solutions that empower clients to achieve their growth ambitions while driving innovation in the region.”

The Strategic Role of Riyadh Air

Riyadh Air is set to operate over 100 aircraft by 2030, with orders for advanced models like the Boeing 787 Dreamliner, known for their fuel efficiency and enhanced passenger experience. This expansion will ensure that the airline remains competitive with regional players like Emirates, Qatar Airways, and Etihad Airways.

The airline is focusing on launching direct routes to major cities across Asia, Europe, and the Americas. This strategy will not only boost international travel but also position Riyadh as a key stopover destination for long-haul flights.

Riyadh Air is integral to Saudi Arabia’s tourism and trade ambitions. By connecting the Kingdom to new markets, the airline will attract international visitors and facilitate global commerce.

King Salman Airport

Scheduled for completion by 2030, King Salman International Airport in Riyadh is set to become one of the largest airports in the world. With a planned capacity of 120 million passengers annually, the airport will serve as the primary hub for Riyadh Air, enhancing its ability to handle increasing passenger and cargo volumes.

This mega project is expected to drive job creation, boost tourism, and establish Riyadh as a global gateway for travelers and businesses.

The growth of the aviation sector is a critical component of Saudi Vision 2030. The Kingdom aims to increase passenger volumes to 330 million annually by 2030, supported by investments in airlines, airports, and regulatory reforms.

Riyadh Air’s expansion is expected to contribute significantly to this growth, helping Saudi Arabia achieve its target of generating $100 billion annually in tourism revenues by the end of the decade.

The Competitive Landscape

Riyadh Air enters a competitive regional market dominated by established carriers like Emirates and Qatar Airways. However, its strategic backing from PIF and access to advanced infrastructure provide it with a unique advantage.

With a focus on sustainability, innovation, and customer experience, Riyadh Air is poised to carve out its niche in the global aviation industry.

The financing deal between Riyadh Air and Emirates NBD is a milestone for Islamic finance in the aviation sector. The use of an Islamic RCF not only ensures compliance with Sharia principles but also sets a precedent for future deals in the region.

As demand for Sharia-compliant financial products continues to grow, this deal highlights the potential of Islamic finance to support large-scale infrastructure and growth projects.

Saudi Arabia’s Economy

The financing deal underscores Saudi Arabia’s commitment to diversifying its economy. By investing in aviation, the Kingdom is reducing its reliance on oil revenues and creating new revenue streams.

The expansion of Riyadh Air is expected to generate thousands of jobs, both directly within the airline and indirectly in supporting sectors like tourism, logistics, and infrastructure.

Through Riyadh Air, Saudi Arabia aims to enhance its global reputation as a modern, forward-thinking nation committed to sustainable growth.

Challenges

While Riyadh Air’s ambitions are vast, the airline faces challenges, including intense competition, fluctuating fuel prices, and the need to balance growth with sustainability. However, its strategic partnerships and government backing position it well to overcome these obstacles.

The partnership between Riyadh Air and Emirates NBD, backed by a SAR 5 billion Islamic revolving credit facility, marks a turning point for Saudi Arabia’s aviation sector. This deal not only supports Riyadh Air’s growth but also highlights the Kingdom’s commitment to transforming its economy under Vision 2030.

As Riyadh Air embarks on its journey to become a global aviation leader, it is set to redefine the travel experience, foster economic growth, and position Saudi Arabia as a hub for innovation and connectivity.

With its ambitious goals and strong backing, Riyadh Air is not just building an airline—it’s shaping the future of Saudi Arabia’s aviation industry and its role on the global stage.