RIYADH: Saudi Arabia has proposed to subsidize airlines that operate unprofitable routes that link it to big global cities in an effort to boost tourist arrivals into the Kingdom.
The Kingdom aims to attract 100 million visitors annually by 2030, and it is offering the subsidy as part of its Air Connectivity Program, the minister of tourism said in an interview.
“The main purpose is to create direct flights to our main target markets,” Ahmed Al-Khateeb said, according to Bloomberg.
“The program will compensate airlines to cover their losses from flying direct flights to these very important hubs for us,” he added.
The funding will come directly from the government, however the amount is not clear.
Al-Khateeb said details on the program’s budget will be available next year, adding “we have to negotiate with every carrier to size it.”
Most recently, the Saudi Arabian flag carrier Saudia has signed an agreement with the National Air Connectivity Program to operate direct flights between the Kingdom and four new international destinations during 2022.
As per the agreement, the airline will operate its direct flights between Riyadh and Zurich in Switzerland, and Jeddah and Barcelona in Spain, in addition to two additional destinations that will be announced later.
The ministry aims to hit 12 million foreign tourists this year, as the sector is progressing to contribute around 4 percent of the Kingdom’s economic output, Al-Khateeb said.
By 2030, Saudi Arabia targets the tourism sector to contribute 10 percent of the economic output.