The Saudi Arabian government is seeking to ratchet up its tourism industry by offering to subsidize airlines that fly unprofitable routes linking the Persian Gulf kingdom to major global cities.
What Happened: According to a Bloomberg report, Saudi Arabia is very late to the world tourism stage — it only began issuing tourist visas in 2019 and the tourism ministry is aiming to attract 12 million foreign visitors this year, which would contribute to roughly 4% of the Saudi economic output. However, Tourism Minister Ahmed Al Khateeb wants to raise that share to 10% by 2030.
"The main purpose is to create direct flights to our main target markets," Al Khateeb said. "The program will compensate airlines to cover their losses from flying direct flights to these very important hubs for us."
What Happens Next: The new subsidy is part of the government's Air Connectivity Program. The first deal has already been signed to secure flights by national carrier Saudia to Barcelona and Zurich.
Al Khateeb did not disclose the depth of the subsidies being paid to airlines, only acknowledging the government will "negotiate with every carrier to size it."
The Saudi government is also aiming to allocate $147 billion to expand its transportation capabilities, with goals that include a new airport in the capital city of Riyadh, a new airline owned by the Public Investment Fund and the expansion of direct destinations served from the country from 100 to 250.
Photo: Paul Davey / Wikimedia Commons
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on Bankrate.com. The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.
All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the Bankrate.com rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.
Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.
Rate collection and criteria: Click here for more information on rate collection and criteria.