Saudi Arabia slashes airport charges by 35% to lure airline traffic

King Khalid International Airport in Riyadh

Saudi Arabia said it will cut airport charges by as much as 35 per cent in a bid to compete in a region that already hosts some of the world’s biggest passenger hubs.

The reduction, which will apply to Riyadh, Jeddah and Dammam airports and be implemented later this year, are the next step in an ongoing privatisation of the sector, the country’s General Authority of Civil Aviation announced at the Farnborough air show on Wednesday. Airports will be allowed flexibility to reduce charges below the announced caps to maximise growth, GACA said.

The move comes after Saudi Arabia said it would offer airlines incentives to fly unprofitable routes and days after the country opened up its airspace to all airlines flying in and out of Israel. The Kingdom is looking to compete better with major hubs in neighboring UAE and Qatar.

Saudi Arabia only began offering tourist visas in late 2019, and subsidising carriers to fly to the country is a recognition of how limited options are for travelers to get there. The move is the latest step in Crown Prince Mohammed bin Salman’s strategy to reduce reliance on the world’s largest crude oil exports and turn Riyadh into a global business centre.