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Saudi Aviation Sector Contributes $53 Bln to Economy

A civilian aircraft flies over the skies of the Saudi capital (Riyadh Air)
A civilian aircraft flies over the skies of the Saudi capital (Riyadh Air)
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Saudi Aviation Sector Contributes $53 Bln to Economy

A civilian aircraft flies over the skies of the Saudi capital (Riyadh Air)
A civilian aircraft flies over the skies of the Saudi capital (Riyadh Air)

Saudi Arabia’s civil aviation sector is playing a crucial role in driving the Kingdom’s economic growth, contributing $53 billion to the Gross Domestic Product (GDP), according to the Saudi General Authority of Civil Aviation (GACA).

This data was revealed in the inaugural 2024 State of Aviation Report, which GACA will launch at the Future Aviation Forum, detailing the contribution of the aviation sector to Saudi Arabia’s economic development and Vision 2030 transformation program.

The forum, held under the patronage of King Salman bin Abdulaziz, will take place from May 20-22 in Riyadh.

Transport Minister and Chairman of GACA Saleh Al-Jasser emphasized the significant strides made by Saudi Arabia’s aviation sector in international metrics, aligning with the transformative goals of Vision 2030 and the National Transport and Logistics Strategy.

These advancements offer unprecedented opportunities in the aviation sector.

The report, developed by GACA in line with its strategic regulatory mandate, highlights that the Saudi aviation sector contributes $20.8 billion through aviation-related activities, enabling a further estimated $32.2 billion in tourism economic activity.

Moreover, aviation supports 241,000 jobs, and a further estimated 717,000 jobs in the tourism sector.

The report also captures the transformation of Saudi aviation, with Saudi Arabia outperforming global aviation sector growth rates in 2023 – achieving 123% of international pre-pandemic seat capacity compared with a global and regional average recovery rate of 90% and 95% respectively, with 2023 growth amounting to 26% as total passenger volumes reached 111.7 million.

Hosted by GACA under the patronage of the Custodian of the Two Holy Mosques King Salman, the Future Aviation Forum will showcase investment opportunities exceeding $100 billion, aimed at realizing Vision 2030 objectives to position Saudi Arabia as a leading logistics hub in the Middle East.

This includes $50 billion in airport investments and nearly $40 billion in new aircraft orders, with the remaining $10 billion allocated to various projects, including $5 billion for logistics zones at major airports in Riyadh, Jeddah, and Dammam.

The event will convene more than 5,000 aviation experts and leaders from more than 100 countries to shape the future of aviation, including executives from international carriers, all major global manufacturers, airport executives, industry leaders and regulators.

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A view shows disused oil pump jacks at the Airankol oil field operated by Caspiy Neft in the Atyrau Region, Kazakhstan April 2, 2025. REUTERS/Pavel Mikheyev/File Photo
A view shows disused oil pump jacks at the Airankol oil field operated by Caspiy Neft in the Atyrau Region, Kazakhstan April 2, 2025. REUTERS/Pavel Mikheyev/File Photo
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Oil Edges Down amid Bearish Trump Tariff Outlook

A view shows disused oil pump jacks at the Airankol oil field operated by Caspiy Neft in the Atyrau Region, Kazakhstan April 2, 2025. REUTERS/Pavel Mikheyev/File Photo
A view shows disused oil pump jacks at the Airankol oil field operated by Caspiy Neft in the Atyrau Region, Kazakhstan April 2, 2025. REUTERS/Pavel Mikheyev/File Photo

Oil prices declined moderately on Thursday as investors weighed the potential impact of US President Donald Trump's tariffs on global economic growth.

Brent crude futures were down 23 cents, or 0.3%, at $69.96 a barrel by 0904 GMT. US West Texas Intermediate crude fell 32 cents, or 0.5%, to $68.06 a barrel.

On Wednesday, Trump threatened Brazil, Latin America's largest economy, with a punitive 50% tariff on exports to the US, after a public spat with his Brazilian counterpart Luiz Inacio Lula da Silva.

He has also announced plans for tariffs on copper, semiconductors and pharmaceuticals and his administration sent tariff letters to the Philippines, Iraq and others, adding to over a dozen letters issued earlier in the week including for powerhouse US suppliers South Korea and Japan.

Trump's history of backpedaling on tariffs has caused the market to become less reactive to such announcements, said Harry Tchilinguirian, group head of research at Onyx Capital Group.

"People are largely in wait and see mode, given the erratic nature of policy making and the flexibility the administration is showing around tariffs," Tchilinguirian said.

Policymakers remain worried about the inflationary pressures from Trump's tariffs, with only "a couple" of officials at the Federal Reserve's June 17-18 meeting saying they felt interest rates could be reduced as soon as this month, minutes of the meeting released on Wednesday showed.

Higher interest rates make borrowing more expensive and reduce demand for oil, Reuters said.

Supporting oil prices however was a weaker US dollar in Thursday's Asia trading session, said OANDA senior analyst Kelvin Wong. A weaker dollar lifts oil prices by making it cheaper for holders of other currencies.

US crude stocks rose while gasoline and distillate inventories fell last week, the Energy Information Administration said on Wednesday. Gasoline demand rose 6% to 9.2 million barrels per day last week, the EIA said.

Global daily flights were averaging 107,600 in the first eight days of July, an all-time high, with flights in China reaching a five-month peak and port and freight activities indicating "sustained expansion" in trade activities from last year, JP Morgan said in a client note.

"Year to date, global oil demand growth is averaging 0.97 million barrels per day, in line with our forecast of 1 million barrels per day," the note said.

Additionally, there is doubt the recent increase in production quotas announced by OPEC+ will result in an actual increase in production, as some members are already exceeding their quotas, said Tony Sycamore, an analyst at IG.

"And others, like Russia, are unable to meet their targets due to damaged oil infrastructure," he said.

OPEC+ oil producers are set to approve another big output boost for September, as they complete both the unwinding of voluntary production cuts by eight members, and the United Arab Emirates' move to a larger quota.