NEOM Airlines (Neom Bay) may be on hold as Saudi Arabia intends to allocate 20% less than its targeted budget this year to the urban development start-up based at Neom Bay by the Red Sea. Bloomberg reported that the decision aligns with billions of dollars of cuts on some of the kingdom's biggest development projects.
A government committee led by the country's de facto ruler, Mohammed Bin Salman, is nearing completion of a comprehensive review of these mega projects, including the futuristic Neom Bay desert development, Bloomberg reported citing sources familiar with the matter who requested anonymity.
Other developments facing cutbacks, the sources claimed, include the Qiddiya Coast, a tourism and entertainment project in Jeddah on the Red Sea once projected to have a potential budget of USD50 billion. Downsizing of other projects can be expected as the government committee finalises its review.
According to Bloomberg, lower oil prices, weaker than projected foreign investment, and three more years of expected deficits in the national budget are forcing Saudi Arabia to rethink its priorities under its Vision 2030 strategy to reshape its economy. In April, Neom announced it had secured a new revolving credit facility worth SAR10 billion riyals (USD2.67 billion) in short-term financing from nine Saudi-based financial institutions.
NEOM Airlines was slated to commence operations in late 2024 or the first quarter of 2025 as Saudi Arabia's third state-owned airline, primarily targeting the Neom Bay development. It planned to serve key global and regional gateways in collaboration with Neom stakeholders and to complement rather than compete with fellow state-owned carriers Saudia (SV, Jeddah International) and Riyadh Air (RXI, Riyadh).
ch-aviation has reached out to NEOM Airlines for comment.
