Aviation

Saudi Arabia’s National Airline Saudia Could Fall Under PIF Ownership

According to the report, the Public Investment Fund (PIF) of Saudi Arabia, the country’s sovereign wealth fund, is reportedly in talks to buy the national airline Saudia.

An important milestone for one of the oldest airlines in the Middle East, this prospective transfer of ownership would also apply to other businesses owned by Saudia, including as its low-cost subsidiary Flyadeal. The action is considered a component of a larger plan to strengthen the PIF’s aviation portfolio by the beginning of 2025, which might improve Saudia’s financial results and operational effectiveness.

There have also been proposals that the airline might be privatized or combined with Riyadh Air, which is already controlled by the PIF. Saudia now has a sizable fleet of over 142 aircraft and serves more than 90 locations worldwide, while the exact value of the deal is still unknown.

However, sources caution that the plan may encounter delays or even be abandoned altogether. The establishment of Riyadh Air is consistent with the PIF’s larger goal of utilizing important industries to promote Saudi Arabia’s economic diversification. Based on projections, it is possible that Riyadh Air will generate billions of dollars in value and hundreds of thousands of jobs, making it a major contributor to the kingdom’s non-oil GDP.

Recently, The UK-based construction company Mace has been selected as the delivery partner for King Salman International Airport (KSIA) in riyadh. When KSIA opens in 2030, it will be the largest airport in the world, marking a significant milestone for the aviation industry.

By 2030, the airport is forecasted to facilitate a substantial increase in annual passenger traffic, skyrocketing from 29 million to a staggering 120 million travelers. Moreover, aircraft traffic within the kingdom is anticipated to surge from 211,000 to over 1 million flights per year following the airport’s inauguration.

Aviation

Why Embraer’s E175-E2 Faces Challenges in the U.S. Market

Embraer, a renowned Brazilian aircraft manufacturer, has a strong reputation for building regional jets that connect smaller cities worldwide.

While its aircraft are widely used in various countries, the United States imposes restrictions on certain Embraer models, particularly the E175-E2. In this article, we’ll explore why this aircraft is blocked from entering the U.S. market.

The Embraer E175 vs. E175-E2

The E175 is allowed in the U.S. and is a popular choice for regional airlines operating short-haul routes.
The E175-E2, a more advanced and fuel-efficient version, faces restrictions due to scope clauses.

1. Scope Clause Restrictions

Scope clauses are agreements between major U.S. airlines and pilot unions that limit the size and weight of aircraft used by regional carriers.

These clauses cap the maximum takeoff weight (MTOW) at 86,000 pounds.
The E175-E2 exceeds this limit with an MTOW of 98,120 pounds (44,600 kg), making it ineligible for regional operations.

2. Fleet Compatibility

U.S. regional carriers typically operate under agreements that favor aircraft compliant with scope clauses.

The original E175 meets these criteria, making it easier to integrate into existing fleets.
The E175-E2, despite its improved efficiency and longer range, is considered incompatible with current contracts.
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3. Market Dynamics

Modifying scope clauses would require complex negotiations between airlines and pilot unions, a process that can be time-consuming and contentious.

Major airlines have shown little interest in pushing for these changes, especially with other compliant aircraft available.
The lack of demand has led Embraer to suspend the development of the E175-E2 in February 2022.

Similar Challenges Faced by Competitors

Embraer isn’t the only manufacturer affected by scope clauses.

Mitsubishi’s SpaceJet program was similarly halted in 2023 due to the same restrictions.
Larger regional aircraft like the E190-E2 (MTOW: 124,340 lbs) are also excluded from regional contracts, further limiting options.
In the U.S., airline and pilot union agreements restrict regional carriers to aircraft with a maximum of 76 seats or a maximum takeoff weight (MTOW) of 86,000 pounds (39,000 kg).
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The Embraer E175-E2, however, exceeds these limits, offering seating for up to 90 passengers in a single-class layout and an MTOW of 98,120 pounds (44,600 kg).
Due to these restrictions, Embraer suspended the E175-E2 program in February 2022, citing scope clause limitations as the primary reason for pausing development.

The Decline of Small Regional Jets

The U.S. market is shifting away from smaller, 50-seat regional jets.

In 2019, there were 660 active 50-seat regional jets.
By November 2024, this number had dropped to 260, creating a gap in the regional aviation market that remains unfilled.

Impact on U.S. Aviation

The inability to introduce newer, more efficient regional jets like the E175-E2 is impacting both airlines and manufacturers:

U.S. airlines must adjust flight routes and seating configurations to accommodate older aircraft models.
Boeing, a domestic competitor, also faces challenges as demand shifts towards larger aircraft, reducing regional jet sales.

Conclusion

While the E175-E2 is permitted and operational in many countries, it remains blocked in the U.S. due to regulatory limitations. This situation highlights the pressures faced by domestic manufacturers and airlines as they struggle to balance efficiency, regulations, and market demands.

What do you think about these restrictions? Should the U.S. update its scope clauses to allow more advanced regional aircraft? Share your thoughts in the comments!