Saudi Arabia's sovereign wealth fund is in talks to purchase national carrier Saudia, a move that could bolster the management of the airline, experts say.
Talks are underway between the Public Investment Fund (PIF) and government officials to iron out a deal, sources told Bloomberg earlier this week, in an attempt to increase to efficiency of the state-owned airline.
The investment fund reportedly hopes to make Saudia profitable and then either privatise the company or merge it with the PIF-owned Riyadh Air, according to the report.
The PIF, headed by Crown Prince Mohammed bin Salman and boasting $925 billion in assets ranging from tourism companies to football clubs, is a key part of the de facto ruler's Vision 2030 economic plan.
Tourism is a key part of this diversification effort, with the PIF hoping to improve Saudia's operations to attract more tourists to the kingdom and increase revenues.
Long closed to tourists, Saudi Arabia has seen massive growth in the tourism sector in recent years, with sports, entertainment, and other events all drawing in visitors, along with developments such as Al-Ula.
Saudi Arabia saw a in visitors in 2023 compared to 2019, the year before the Covid-19 crisis broke out.
Saudia was formed in 1945, making it one of the Gulf's oldest national carriers, but its profile has been eclipsed by neighbouring airlines such as Qatar Airways, Emirates, Oman Air, and Etihad.
In 2023, Prince Mohammed announced the launch of a second national carrier, Riyadh Air, which is run by the PIF, as a competitor to rival Gulf airlines.
Riyadh Air also provides the kingdom with a modern and efficient transport carrier that will be essential if Saudi Arabia is ever to become a regional tourism hub.
Experts say transferring Saudia to the PIF will mean access to its extensive infrastructure, networks, and other assets, including the low-cost airline flyadeal.
Saudia is a key player in the Hajj and Umrah pilgrimages, which sees millions of Muslims descend on the kingdom each year.