Airlines

This Saudi Arabian airline may order 80 Boeing 787 planes.

His Royal Highness Crown Prince Mohammad bin Salman bin Abdulaziz, Prime Minister and Chairman of the Public Investment Fund (“PIF”), announced today the establishment of “Riyadh Air,” a PIF wholly owned company.

The new national carrier will leverage Saudi Arabia’s strategic geographic location between the three continents of Asia, Africa, and Europe, enabling Riyadh to become a gateway to the world and a global destination for transportation, trade, and tourism.

According to Reuters, Boeing is ready to enter into a contract with Saudi Arabia’s newly created Riyadh airlines, and it is also offering some discounts to airline operators in anticipation of significant future demand. Riyadh Airlines is planning to purchase roughly 80 wide-body aircraft from Boeing, all of which are B787 Dreamliner. According to certain sources, Airbus is also in the midst of finalizing the A350 agreement.

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Saudi Airlines now plans to fly more than 100 destinations, which means it will require 30% narrow-body and 70% wide-body aircraft. However, no formal confirmation has been made. The trade might take place at the Paris Airshow in 2023. Boeing started delivering the Boeing 787 aircraft a few days later, as it began to focus on order backlogs and new order fulfilments.

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Riyadh Air will be chaired by His Excellency Yasir Al-Rumayyan, Governor of PIF, while Tony Douglas, who brings more than 40 years of experience in the aviation, transportation, and logistics industries, has been appointed Chief Executive Officer. The airline’s senior management will include Saudi and international expertise.

Operating from Riyadh as its hub, the airline will usher in a new era for the travel and aviation industry globally. Riyadh Air will be a world-class airline, adopting the global best sustainability and safety standards across its advanced fleet of aircraft equipped with the latest cutting-edge technology.

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The airline is expected to add USD20 billion to non-oil GDP growth and create more than 200,000 direct and indirect jobs.

As a wholly owned PIF subsidiary, the new national airline is set to benefit from PIF’s investment expertise and financial capabilities while expanding on the company’s operations to become a leading national carrier.

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The new national airline represents PIF’s latest investment in the sector, along with the recently announced King Salman International Airport masterplan.

Riyadh Air aims to enhance customers’ journeys while connecting them to over 100 destinations around the world by 2030; by offering an exceptional experience with authentic, warm Saudi hospitality at its heart.

The airline will provide tourists from around the world the opportunity to visit Saudi Arabia’s cultural and natural attractions. Riyadh Air will also serve as a catalyst for the Saudi National Transport and Logistics Strategy and the National Tourism Strategy by increasing air transport options, raising cargo capacity, and, in turn, growing international passenger traffic.

The establishment of Riyadh Air is part of PIF’s strategy to unlock the capabilities of promising sectors that can help drive the diversification of the local economy. It will enable a more financially resilient aviation ecosystem in Saudi Arabia, supporting the industry’s global competitiveness in line with Vision 2030.

Airlines

German Carrier Lufthansa Plans for 20% Job Cuts in Administration

Lufthansa Airlines is reportedly planning significant job cuts in its administrative workforce. According to Manager Magazin, the German carrier intends to reduce administrative positions by 20% as part of its cost-cutting measures amidst an anticipated decline in earnings.

This reduction could impact approximately 400 jobs, the report revealed. While Lufthansa has not directly commented on the layoffs, the airline confirmed its goal of cutting administrative costs by 20% by 2028.

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The strategy involves leveraging digital technologies, including artificial intelligence and automation. “A hiring freeze is currently in place for administrative roles at Lufthansa Airlines,” said a company spokesperson.

The staff reduction is expected to occur through natural attrition and age-related turnover, rather than forced layoffs. The internal projection cited by the magazine warns that Lufthansa could face an operating loss of €800 million ($843.92 million) by 2026 if no corrective measures are taken.

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The report highlights the challenges companies face in aligning workforce requirements with current and future demands. Failure to adapt could necessitate drastic actions, such as restructuring and layoffs, which carry significant repercussions for both the organization and its employees.

As Lufthansa navigates these challenges, the airline appears committed to balancing cost efficiency with digital transformation to maintain its competitiveness in a rapidly evolving industry.