Saudi Arabia Explores Untapped Markets to Expand Global Flight Connections

The Air Connectivity Program pavilion during the annual meeting of the International Aviation Council in Riyadh (Photo by: Turky Al-Agili)
The Air Connectivity Program pavilion during the annual meeting of the International Aviation Council in Riyadh (Photo by: Turky Al-Agili)
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Saudi Arabia Explores Untapped Markets to Expand Global Flight Connections

The Air Connectivity Program pavilion during the annual meeting of the International Aviation Council in Riyadh (Photo by: Turky Al-Agili)
The Air Connectivity Program pavilion during the annual meeting of the International Aviation Council in Riyadh (Photo by: Turky Al-Agili)

Saudi Arabia has established the Air Connectivity Program in 2021 to work with air carriers and airports with the aim to launch additional routes and flights to targeted destinations.

The Kingdom is seeking to become a global aviation hub through several initiatives and programs, at the forefront of which is the National Aviation Strategy, which seeks to connect 250 direct destinations to and from Saudi airports, increase air traffic, and raise the volume of cargo.

In remarks to Asharq Al-Awsat, Executive Vice President of Aviation Development in the Air Connectivity program, Rashid Al-Shammari talked about a plan to expand air routes through 29 airports in the Kingdom by adding the largest number of plane seats.

He explained that the program links the National Tourism Strategy to the National Aviation Strategy through the launch of new routes, additional flights in priority target markets and seasonal trips.

He made his comments on the sidelines of the first annual meeting in the Middle East of the General Assembly of the Airports Council International, which is held in Riyadh from May 22-23.

He stated that the Air Connectivity Program has been able to launch more than 50 routes since its inception in 2021, and works to facilitate entry into the market and enhance expansion opportunities for travel partners to achieve the goals of Vision 2030, in addition to empowering cadres and developing operational excellence based on the latest technologies.

Some of the routes that were launched include a connection between Beijing and Riyadh. The program also cooperated this year with the Italian national carrier ETA to operate flights from the city of Rome to Jeddah and Riyadh.

At the global level, the Kingdom jumped 14 places in the rate of international air connectivity, to reach the 13th place in 2023 compared to 27th in 2019, according to the latest air connectivity index report issued by the International Air Transport Association (IATA), in a classification that includes more than 200 countries.

Moreover, in 2023, Riyadh Air was established by the Public Investment Fund, targeting more than 100 destinations by 2030 and providing more than 200,000 direct and indirect job opportunities, as well as contributing SAR 75 billion ($20 billion) to the country’s gross domestic product.



Israel’s ‘Economic War’ Chokes Occupied West Bank

Palestinians queue to withdraw money from an ATM in the main market in Ramallah city in the Israel-occupied West Bank on June 9, 2024.
Palestinians queue to withdraw money from an ATM in the main market in Ramallah city in the Israel-occupied West Bank on June 9, 2024.
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Israel’s ‘Economic War’ Chokes Occupied West Bank

Palestinians queue to withdraw money from an ATM in the main market in Ramallah city in the Israel-occupied West Bank on June 9, 2024.
Palestinians queue to withdraw money from an ATM in the main market in Ramallah city in the Israel-occupied West Bank on June 9, 2024.

Palestinian teenagers bounced on trampolines and jumped through hoops inside a towering tent on the outskirts of Ramallah, the financial hub of the occupied West Bank.

But the circus students weren't the only ones bending over backwards in the pavilion: the school's director faced financial hurdles to buy the tent from Europe and trampolines from Asia.

"We are suffering with international payments," said Mohamad Rabah, head of the Palestinian Circus School, describing a bureaucratic process that could delay equipment delivery by up to a month.

Banking in the Palestinian territories is challenging, with the Palestinian Authority (PA) under scrutiny for potential terror financing, hindering transactions.

Israel has occupied the West Bank since 1967, with strong economic ties allowing two Israeli lenders to serve as correspondent banks in the Palestinian territory.

But this may change if Israel's far-right Finance Minister Bezalel Smotrich carries out threats to sever a vital banking route next month.

Since Hamas's October 7 attack triggered the Gaza war, Israel has imposed economic curbs on the PA, withholding tax revenues it collects on its behalf.

Smotrich said this week he had redirected $35 million in PA tax revenues to families of "terrorism" victims, a move condemned by the United States.

After three European countries recognized Palestinian statehood in May, Smotrich told Prime Minister Benjamin Netanyahu he would not extend indemnity to banks that transfer the funds from the end of June.

Israel's Bank Hapoalim and Israel Discount Bank need protection, expiring on July 1, to avoid sanctions for dealing with Palestinian lenders.

Israel's central bank and finance ministry declined to comment when contacted by AFP.

A Palestinian fruit vendor arranges his street cart in the main market in Ramallah city in the Israel-occupied West Bank on June 9, 2024. (AFP)

- 'Humanitarian crisis' -

The banking channel used to pay for West Bank imports -- including essential goods like water, fuel and food -- handles $8 billion yearly.

Palestinian businesses receive nearly $1.7 billion annually for exports, according to the Palestine Monetary Authority.

"For us, because our economy is dependent on the Israeli economy, because Israel is controlling the border, the impact will be high," said PMA governor Feras Milhem.

The Palestinian economy is largely governed by the 1994 Paris Protocol, which granted sole control over the territories' borders to Israel, including the right to collect import duties and value-added tax for the PA.

Palestinian livelihoods have also been hurt by bans on laborers crossing into Israel and by a sharp downturn in tourism in the territory, including a quiet Christmas season in Bethlehem.

The United States has urged Israel to improve conditions, warning that severing the banking route would have a dire impact on the West Bank economy.

"I believe it would create a humanitarian crisis in due course if Palestinian banks are cut off from Israeli correspondence," US Treasury Secretary Janet Yellen said last month.

Western governments fear Israel's economic policies could destabilize the West Bank.

"The banking system may collapse and therefore the PA may collapse as well," a European diplomatic source in Jerusalem told AFP on condition of anonymity.

"The PA is in a financial crisis and it could collapse before August."

A Palestinian vendor unloads his stock in front of a shop in the main market in Ramallah city in the Israel-occupied West Bank on June 9, 2024. (AFP)

- Digital currency -

Palestinian businessmen say their bottom lines have been hit since October 7.

Imad Rabah, who owns a plastics company, said his net income had fallen 50 percent in one year.

Musa Shamieh, who owns a womenswear company said the Israeli policies were designed to push Palestinians to leave the West Bank.

"They want us to leave our land and they know it will be hard for us to stay if we can't do business," Shamieh said.

Israel's harsh economic policies could eventually drive Palestinian policymakers to pursue sweeping changes to the monetary system.

"We need to work on a plan B when it comes to the trade relations," said Milhem, governor of the PMA, which uses an image of the former Palestinian pound as its logo.

Yousef Daoud, professor at the West Bank's Birzeit University, said the territory could scrap the shekel as its de facto currency in favor of a digital alternative.

"We can make our e-currency, just collect all the shekels, issue an equivalent amount of Palestinian pounds, one-to-one fixed exchange rate, and have the Palestinians deal with e-currency," he said.

"Somehow, eventually, we'll get rid of the shekel."