A consortium comprising Air Arabia, Nesma Group, and KUN Holding has secured a licence from Saudi Arabia’s General Authority of Civil Aviation to establish and operate a new national low-cost airline based in Dammam.
The carrier will operate from King Fahd International Airport and is expected to support the country’s aviation goals under Vision 2030.
The new airline is expected to operate 24 domestic and 57 international routes, utilising a fleet of 45 aircraft, by 2030. The consortium aims to serve up to 10 million passengers annually from Dammam and the wider Eastern Province. The initiative is projected to generate over 2,400 direct jobs in the aviation sector and is positioned as a key enabler of regional economic activity and tourism growth.
Air Arabia brings its experience in low-cost operations across the Middle East and North Africa to the joint venture. Nesma Group and KUN Holding provide local market access and infrastructure support. According to statements from the partners, the airline is intended to align with Saudi Arabia’s broader transport strategy and tourism expansion plans.
This development comes amid strong competition in the Kingdom’s aviation market. Saudi Arabia already operates several budget carriers, including flyadeal and flynas, both of which have expanded route networks and fleets over the past two years. Flyadeal currently serves over 80 destinations and operates more than 60 aircraft. The addition of another player is expected to increase capacity and put downward pressure on fares, particularly in underserved routes.
King Fahd International Airport handled 12 million passengers in 2024, up 15% year-on-year. A SAR 1.6 billion ($426 million) development plan was recently announced to enhance the airport’s infrastructure, supporting the expected rise in passenger and cargo traffic. Dammam’s strategic location near Bahrain and Kuwait is likely to offer opportunities for the new carrier to capture cross-border demand and regional transit traffic.
The consortium will benefit from regulatory support, with GACA prioritising the development of regional connectivity under its National Transport and Logistics Strategy. The government aims to triple air passenger traffic to 330 million annually by 2030 and increase the number of international destinations served from Saudi airports to 250. The new carrier is part of this strategy and is expected to contribute to capacity building in one of the country’s fastest-growing economic zones.
The launch timeline is set for 2026, pending final approvals, fleet procurement, and route development. The airline will focus on cost discipline, standardised fleet operations, and ancillary revenue streams, following the business model already proven by Air Arabia in its hubs across Sharjah, Ras Al Khaimah, Morocco and Egypt.
Saudi Arabia’s aviation sector is undergoing major reform. In addition to this new carrier, Riyadh Air, backed by the Public Investment Fund, is preparing to commence operations in 2025 as a premium international airline. The two developments reflect a bifurcated strategy: one focused on long-haul connectivity from Riyadh and the other on domestic and regional value air travel from Dammam.
The Dammam-based airline’s emphasis on affordability, high-frequency routes and regional linkages is expected to improve air access across the Eastern Province, which has traditionally relied more on road transport and international hubs in neighbouring countries. The entry of a dedicated low-cost national carrier in this region marks a shift in strategic planning, positioning Dammam as a secondary key air transport node in Saudi Arabia, following Riyadh.
Industry observers note that the success of the new airline will depend on rapid mobilisation, efficient fleet acquisition, route optimisation and customer service execution. The partners have signalled readiness, citing their operational experience, financial commitment and alignment with national aviation policy.
This is Air Arabia’s second low-cost airline venture in Saudi Arabia, following its joint venture with the Public Investment Fund to launch Fly Arna in Armenia. The new Dammam-based airline, however, is expected to focus exclusively on Saudi domestic and regional markets.
