Riyadh Seeks to Achieve Recovery Plan for International Aviation Sector

The Saudi Energy Minister attends the Future of Civil Aviation conference in Riyadh on Monday. (Asharq Al-Awsat)
The Saudi Energy Minister attends the Future of Civil Aviation conference in Riyadh on Monday. (Asharq Al-Awsat)
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Riyadh Seeks to Achieve Recovery Plan for International Aviation Sector

The Saudi Energy Minister attends the Future of Civil Aviation conference in Riyadh on Monday. (Asharq Al-Awsat)
The Saudi Energy Minister attends the Future of Civil Aviation conference in Riyadh on Monday. (Asharq Al-Awsat)

Saudi Arabia has revealed plans to strengthen its capabilities in the aviation sector over the next ten years, with the aim to become a leading center for aviation and air transport in the Middle East and the world.

Under the patronage of the Custodian of the Two Holy Mosques, the Saudi General Civil Aviation Authority announced an international initiative to unify procedures and policies regarding health requirements, in order to support the sector’s recovery from the Covid-19 pandemic.

This came during the launch of the Future of Civil Aviation conference in Riyadh on Monday.

In this regard, Saudi Energy Minister Prince Abdulaziz bin Salman underlined the efforts to face energy challenges in the aviation sector.

“We are focusing on two fronts; first, we work with the aerospace industry to develop engines, materials, and innovation; and second, on low-carbon aviation fuels that we believe will be the transitional fuels of the future,” he said.

Speaking during his participation in a dialogue session entitled, “Energy Transformation: How We Can Overcome the Sustainability Challenge”, the minister noted that energy security was the most important pillar, “without which the goals of economic growth and sustainability cannot be achieved, including dealing with climate change.”

He added: “We are not in a position to choose among the sustainability solutions; rather, we should take advantage of all available options, to achieve our goals realistically.”

Prince Abdulaziz stressed that these goals could be reached within the framework of the circular carbon economy, through carbon sequestration from the source, in addition to the use of captured gas in the production of industrial fuels.

According to the Saudi official, the aviation sector emissions do not exceed two percent of the total emissions.

“Whether this percentage is large or small, the world agrees on the importance of finding solutions to reduce emissions of all sectors,” he remarked.

The Saudi Energy Minister noted that the gap between crude oil prices and the prices of jet fuel, diesel and gasoline was about 60 percent in some cases, due to a lack of investment in refining capacity.

“The world needs to consider energy security, sustainability and overall affordability,” he said. “All types of mobility fuels have risen sharply, and the gap between crude oil prices and these products in some cases actually reaches 60 percent.”

On whether geopolitical events in Europe will accelerate or impede the transition to cleaner energy in the medium term, the Saudi minister said: “I think it brought us back to reality about how actual conditions in which we live can undermine aspirations.”

He said that even before the Ukraine crisis, the “dreamland scenario of net zero emissions was faced by many realities, including the cost.”

For his part, Salvatore Sciacchitano, President of the Council of the International Civil Aviation Organization (ICAO), said that the number of passengers around the world was likely to constitute, by the end of 2022, 75 percent of the number achieved in 2019, before the outbreak of the Covid-19 pandemic.

The number of travelers is growing in certain regions faster than others, such as Latin America and Europe, compared to regions that are still suffering from the effects of the pandemic, such as China, he noted.

Meanwhile, the Saudi Civil Aviation Authority said on Monday that it was working to develop a framework aimed at facilitating international travel, in cooperation with the ICAO.

The Saudi initiative will promote a policy of standardizing procedures to ease international travel, whether for passengers or airlines and government agencies, by creating a single digital platform that provides the latest information and developments with clarity and transparency, and identifies entry requirements for all participating countries.

If endorsed by the member states of the ICAO in October, the initiative will enable the unification of procedures and policies regarding health requirements to support the sector’s post-pandemic recovery.



Saudi Arabia Sees Highest Level of Non-oil Private Sector Activity in 4 Months

The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)
The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)
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Saudi Arabia Sees Highest Level of Non-oil Private Sector Activity in 4 Months

The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)
The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)

Business activity in Saudi Arabia's non-oil sector accelerated to a four-month high in September, driven by strong demand, which led to faster growth in new orders. The Riyad Bank Saudi Arabia Purchasing Managers' Index (PMI), adjusted for seasonal factors, rose to 56.3 points from 54.8 in August, marking the highest reading since May and further distancing itself from the 50.0 level that indicates growth.

The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders, alongside challenges in supply. The improvement in business conditions contributed to a significant rise in employment opportunities, although difficulties in finding skilled workers led to a shortage in production capacity.

At the same time, concerns over increasing competition caused a decline in future output expectations. According to the PMI statement, inventories of production inputs remained in good condition, which encouraged some companies to reduce their purchasing efforts.

Growth was strong overall and widespread across all non-oil sectors under study. Dr. Naif Al-Ghaith, Senior Economist at Riyad Bank, said that the rise in Saudi Arabia's PMI points to a notable acceleration in the growth of the non-oil private sector, primarily driven by increased production and new orders, reflecting the sector’s expansionary activity.

Al-Ghaith added that companies responded to the rise in domestic demand, which plays a crucial role in reducing the Kingdom's reliance on oil revenues. The upward trend also indicates improved business confidence, pointing to a healthy environment for increased investment, job creation, and overall economic stability.

He emphasized that this growth in the non-oil sector is particularly important given the current context of reduced oil production and falling global oil prices. With oil revenues under pressure, the strong performance of the non-oil private sector acts as a buffer, helping mitigate the potential impact on the country's economic conditions.

Al-Ghaith continued, noting that diversifying income sources is essential to maintaining growth amid the volatility of oil markets. He explained that increased production levels not only enhance the competitiveness of Saudi companies but also encourage developments aimed at expanding the private sector's participation in the economy.

This shift, he said, provides a more stable foundation for long-term growth, making the economy less susceptible to oil price fluctuations.