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Saudi-British Air Connectivity Expands with New Virgin Airlines Route

The agreement was signed in the presence of Saudi Minister of Tourism Ahmed Al-Khateeb. (Photo: Turki Al-Aqili)
The agreement was signed in the presence of Saudi Minister of Tourism Ahmed Al-Khateeb. (Photo: Turki Al-Aqili)
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Saudi-British Air Connectivity Expands with New Virgin Airlines Route

The agreement was signed in the presence of Saudi Minister of Tourism Ahmed Al-Khateeb. (Photo: Turki Al-Aqili)
The agreement was signed in the presence of Saudi Minister of Tourism Ahmed Al-Khateeb. (Photo: Turki Al-Aqili)

Saudi Arabia and the United Kingdom are set to launch a direct route connecting Riyadh and London, following the signing of a cooperation agreement between the Air Connectivity Program and Virgin Atlantic.

The agreement, which was signed on Monday in Riyadh in the presence of Saudi Minister of Tourism Ahmed Al-Khateeb, aims to enhance air connectivity between the two kingdoms, facilitating access to various cities in Saudi Arabia. The route will operate daily between London Heathrow Airport and King Khalid International Airport in Riyadh starting in March 2025, using Airbus A330 aircraft.

Virgin Atlantic’s entry into the Saudi market marks the tenth airline to collaborate with the Air Connectivity Program since the beginning of 2024.

In remarks to Asharq Al-Awsat, Majed Khan, the CEO of the Air Connectivity Program said that the agreement will help bring visitors to and from Riyadh and other areas of Saudi Arabia, such as Jeddah, Dammam, and Madinah as major cities, and then to the Red Sea, Jazan, and Al-Baha, supporting the national tourism strategy.

He further explained that Virgin Atlantic’s direct flights between London and Riyadh will support the growth of inbound international tourism from the UK and North America’s airline network.

As a member of the SkyTeam alliance, Virgin Atlantic will enhance air connectivity alongside Saudi Arabia’s national carrier, Saudia Airlines, between Riyadh, London, and other destinations within the network.

Virgin Atlantic CEO Shai Weiss told Asharq Al-Awsat that the Kingdom is experiencing rapid growth driven by Vision 2030, noting that he looks forward to introducing UK customers to Saudi Arabia’s rich culture, heritage, and commercial hub.

Weiss noted that the new services will offer great opportunities for connecting friends, relatives, and businesses, not only within the UK but also in the US, thanks to the partnership with Delta Airlines.

He continued that the agreement will boost the codeshare with its SkyTeam partner, Saudia, further expanding connectivity across the region and beyond while offering new benefits to frequent customers.

Weiss also highlighted the positive impact this step will have in attracting more tourists to Saudi Arabia, which is developing its tourism industry.

Virgin Atlantic, which has a fleet of 45 wide-body aircraft, announced last month the purchase of seven additional Airbus aircraft.

The Air Connectivity Program aims to boost tourism growth in the Kingdom by enhancing connections between Saudi Arabia and the world, through the development of current and potential air routes.

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Saudi GDP Grows 2.8% in First Quarter

The Saudi capital, Riyadh (SPA)
The Saudi capital, Riyadh (SPA)
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Saudi GDP Grows 2.8% in First Quarter

The Saudi capital, Riyadh (SPA)
The Saudi capital, Riyadh (SPA)

Saudi Arabia's real gross domestic product grew 2.8% in the first quarter, year-on-year, preliminary government estimates showed on Thursday.

Non-oil activities grew 2.8% in the quarter, and oil activities increased 2.3% from the prior-year period, the General Authority of Statistics data ⁠showed.

On a quarterly basis, growth shrank 1.5% in the three months to March 31 compared to the fourth quarter, driven by a decline in oil activities.

Oil activity decreased 7.2% from the fourth quarter, while non-oil activity was almost flat.

Business

IMF Warns Asia to Keep Policy in Balance Amid Energy Disruptions

FILE PHOTO: A view of the International Monetary Fund (IMF) logo at its headquarters in Washington, D.C., US, November 24, 2024. REUTERS/Benoit Tessier/File Photo
FILE PHOTO: A view of the International Monetary Fund (IMF) logo at its headquarters in Washington, D.C., US, November 24, 2024. REUTERS/Benoit Tessier/File Photo
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IMF Warns Asia to Keep Policy in Balance Amid Energy Disruptions

FILE PHOTO: A view of the International Monetary Fund (IMF) logo at its headquarters in Washington, D.C., US, November 24, 2024. REUTERS/Benoit Tessier/File Photo
FILE PHOTO: A view of the International Monetary Fund (IMF) logo at its headquarters in Washington, D.C., US, November 24, 2024. REUTERS/Benoit Tessier/File Photo

Asian countries will need to keep their powder dry in preparation for future shocks even as they tackle an energy crisis caused by the Iran War, IMF Director for Asia Pacific Krishna Srinivasan said on Thursday.

With energy supplies running short due to the logjam in the Strait of Hormuz, southeast Asian economies have budgeted significant sums to cushion the impact of surging prices, and have also introduced measures to conserve energy, including work from home plans.

But Srinivasan, speaking at a media roundtable, warned countries against ramping up energy subsidies.

"If you give generalised subsidies, it's very hard to pull it back," he said, adding that countries should instead provide budget neutral ⁠and targeted fiscal ⁠support, and maintain fiscal discipline.

"In other words, cut elsewhere to support people who are being hit by the energy shock," Reuters quoted him as saying.

Srinivasan said that while some markets, such as Thailand and China, can hold off on tightening monetary policy because they are in deflationary territory, markets already above their inflation targets, including Australia, need to start now.

He also ⁠noted that some markets, such as the Philippines, have decided to tighten preemptively to anchor inflation expectations, but he added that the IMF's advice would have been to see through the shock and wait to see if inflation really picks up in a meaningful way.

"You may want to take insurance upfront or you may want to wait and see so that you don't hurt growth ... it's a very difficult balance to strike as a central bank governor," he said.

The IMF cut its global GDP outlook for 2026 to 3.1% on April 14, assuming ⁠a short-lived Middle ⁠East conflict and oil prices normalising in the second half of the year.

However, IMF chief economist Pierre-Olivier Gourinchas warned that the fund's "adverse scenario" of 2.5% growth looked increasingly likely, with continued energy disruptions and no clear path to end the conflict.

Srinivasan said that if the Strait of Hormuz remains closed beyond the next three months and oil prices stay elevated for the rest of the year, the IMF's more severe growth scenarios will become more likely.

There are still downside risks to growth, with a number of uncertainties facing the world economy, including the duration of the energy crisis and the severity of fertiliser shortages, which could create a food supply shock, he said.

Business

Euro Zone Inflation Soars Further Above ECB Target

FILE -Clouds cover the sky over the headquarters of the European Central Bank in Frankfurt, Germany, Sept. 11, 2025. (AP Photo/Michael Probst, File)
FILE -Clouds cover the sky over the headquarters of the European Central Bank in Frankfurt, Germany, Sept. 11, 2025. (AP Photo/Michael Probst, File)
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Euro Zone Inflation Soars Further Above ECB Target

FILE -Clouds cover the sky over the headquarters of the European Central Bank in Frankfurt, Germany, Sept. 11, 2025. (AP Photo/Michael Probst, File)
FILE -Clouds cover the sky over the headquarters of the European Central Bank in Frankfurt, Germany, Sept. 11, 2025. (AP Photo/Michael Probst, File)

Euro zone inflation surged further in April on soaring energy costs, Eurostat data showed on Thursday, adding to the case for interest rate hikes, even if benign underlying price growth figures ease the urgency of any move.

Inflation in the 21 countries sharing the euro currency jumped to 3.0% this month from 2.6% in March, moving further above the European Central Bank's 2% target, with energy costs accounting for the vast majority of the increase.

A closely watched figure ⁠on underlying or 'core' ⁠inflation, which excludes volatile food and energy prices, meanwhile slowed to 2.2% from 2.3% a month earlier.

Services inflation, a stubbornly high component of the price basket over the past several years, slowed to 3.0% from 3.2% while inflation for non-energy industrial ⁠goods, a key drag on prices picked up to 0.8%.

The figures are a mixed bag for the ECB, which is meeting on Thursday and will likely keep interest rates unchanged, even if it signals that policy tightening is increasingly likely, Reuters reported.

The high headline inflation print strengthens the argument for interest rate hikes but the underlying figures suggest that the initial energy shock is not yet creating major ⁠second round effects.

The ⁠ECB is largely powerless against an energy shock but must step in if these second round effects become visible as they risk creating a hard-to-break self-sustaining inflation spiral.

This is why investors expect the ECB to hike its 2% deposit rate already in June and see at least two more moves before the end of the year.

This outlook is volatile, however, and largely depends on developments in the Iran war and oil prices, which hit a four-year-high of $124 on Thursday.