Gulf Aviation Set for Landmark IPOs Amid Tourism Push

Etihad Airways and Saudi budget carrier flynas are poised to launch initial public offerings (IPOs) this year, marking the first listings by Gulf airlines in nearly two decades, according to sources familiar with the matter.

• Etihad’s Plans: Abu Dhabi’s Etihad is eyeing a potential 20% stake sale as early as this quarter, targeting both local and international investors. The IPO could raise ~$1 billion, becoming the region’s first airline listing since Kuwait’s Jazeera Airways in 2008, sources told Reuters.
• Saudi’s Flynas: Backed by billionaire Prince Alwaleed Bin Talal’s Kingdom Holding, flynas is reportedly worth at least $2 billion and could list in Riyadh this year. Kingdom Holding’s CEO confirmed it is in the “final stage” of securing regulatory approval for the IPO.
• Regional Momentum: Qatar Airways and Dubai’s Emirates have also been floated as potential IPO candidates, though Emirates’ chairman noted the decision rests with the Dubai government.

Economic Diversification Drive:
The listings align with Gulf governments’ efforts to pivot from oil dependency to sectors like tourism, bolstered by post-pandemic travel demand. Aviation analyst John Strickland highlighted the region’s geographic advantage as a global hub between Europe and Asia, coupled with Dubai’s tourism appeal.

Etihad’s Growth Strategy: Following a multi-year restructuring, Etihad aims to expand its fleet and destinations to over 125 airports by 2030. Abu Dhabi’s new $1 billion terminal, tripling capacity to 45 million passengers annually, supports this vision.

Saudi Vision 2030: Flynas plans to grow its fleet from 60+ to 160+ aircraft by 2030, capitalizing on Saudi Arabia’s young population and tourism ambitions.

Market Outlook:
The Middle East accounted for 9.4% of global air passenger traffic in 2023 (IATA data), with demand up 8.7% YoY in November 2024. Gulf IPOs raised $12.2 billion in 2024 (LSEG data), reflecting investor confidence.

“Regional valuations are high, and markets are vibrant,” said Mohamed Ali Yasin, CEO of Oracle Financial Consultancy.

Trump Urges Saudi Arabia to Cut Oil Prices, Boost U.S. Investment to $1 Trillion

U.S. President Donald Trump called on Saudi Arabia and OPEC to reduce oil prices during a virtual speech at the World Economic Forum, linking lower prices to an immediate end to the Russia-Ukraine war.

Investment Demand: Trump vowed to ask Crown Prince Mohammed bin Salman to increase Saudi-U.S. investment plans from 600 billion to 1 trillion, stating: “But I’ll be asking the Crown Prince, who’s a fantastic guy, to round it out to around 1 trillion”, as reported by Reuters. This follows Saudi Arabia’s earlier announcement, reported by its state news agency, of a 600 billion investment and trade expansion with the U.S. over the next four years.

Oil Price Claims: Trump asserted, “If the price came down, the Russia-Ukraine war would end immediately” (Reuters).

Context:
The remarks followed a White House-reported discussion between Trump and the Crown Prince about Saudi Arabia’s “international economic ambitions.” The Saudi government communications office did not immediately return a request for comment on Trump's remarks at the forum.

Why It Matters:

The Gulf aviation IPOs signal a strategic shift toward tourism and non-oil revenue streams, with Saudi Arabia’s Vision 2030 at the forefront.

Trump’s remarks highlight Saudi Arabia’s pivotal role in global energy markets and potentially deepening economic partnership with the U.S., as Riyadh advances post-pandemic reforms aimed at long-term prosperity and international collaboration.

Sources: Reuters reporting, IATA, LSEG, cited analysts, and company statements.