Delta Air Lines is joining forces with Saudi Arabia’s newest airline in a pact that gives the fledgling Gulf carrier a major U.S. partner before it even takes off on its first flight.
Delta signed a strategic agreement at its Atlanta headquarters on Tuesday with Riyadh Air, the kingdom’s newest airline, which plans to begin operations in 2025.
The memorandum of understanding sets the stage for a deeper connection between the two airlines, serving “as the foundation for a strategic partnership,” the companies said in a statement announcing the news.
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A deep partnership
The deal between Delta and Riyadh calls for future line and codeshare agreements, subject to regulatory approvals, the companies noted.
They also plan to explore a joint venture in the future. Such agreements typically allow airlines to coordinate pricing, scheduling and revenue sharing. Delta currently has joint ventures with some of its most prominent partner airlines, including major carriers such as Korean Air, Air France-KLM, Virgin Atlantic, LATAM and Aeromexico (although the latter deal is currently in danger of ending amid a dispute with Biden administration).
The companies also teased an upcoming frequent-flier deal that would likely leverage the power of Delta’s SkyMiles program, noting plans for “a deeper partnership that includes loyalty” and other operational components.
Non-stop flights to Saudi Arabia are planned
As part of the deal, Delta plans to launch future non-stop service to King Khalid International Airport (RUH) in Riyadh, the Saudi capital, the companies said.
No US airlines currently fly to Saudi Arabia, and Saudi flag carrier Saudia is currently the only carrier that operates regularly scheduled service between the kingdom and the US, with nonstop flights to New York City, Washington, DC, and Los Angeles.
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The tourism push is funded by the sovereign wealth fund
The Delta-Riyadh ties come as Saudi Arabia is in the midst of a major tourism push, fueled by hundreds of billions of dollars poured into its Public Investment Fund aimed at diversifying its economy beyond oil.
Riyadh Air, which was launched as a company last year, apparently hopes to compete with other major carriers in the Persian Gulf, such as Emirates, Qatar and Etihad. Its CEO, Tony Douglas, previously ran Etihad.
The airline last year announced firm orders for 39 Boeing 787-9 Dreamliners, with options for 33 more.
Riyadh hopes to start flights by 2025 and has plans to connect to 100 global destinations by 2030.
Delta is not Riyadh’s first partnership. In recent months, the new carrier has also signed strategic agreements with Singapore Airlines and Turkish Airlines, among others.
Delta gains a new Gulf partner
Delta CEO Ed Bastian cited new choices, benefits and destinations for customers in announcing the partnership with the Saudi airline.
“Most importantly, Riyadh Air shares Delta’s commitment to delivering an elevated customer experience, which is why we look forward to building and expanding this partnership in the months and years ahead,” Bastian said in a statement.
It’s also worth noting that Delta’s extended relationship with the Saudi startup comes after it spent much of the last decade battling the biggest Gulf carriers over US access and alleged subsidies from the respective governments. of their rivals.
The dispute was eventually settled, but in the aftermath, American Airlines eventually dropped its objections to doubling its partnership with Qatar through the Oneworld Alliance, and United forged its own pact with Emirates — a rival it also once criticized.
Delta has maintained ties to Saudi through the SkyTeam alliance, but its newest deal with Riyadh Air could give it a regional partner it hopes will one day compete with the connectivity offered by more established Gulf carriers.
The Delta-Riyadh deal also includes an exclusivity agreement specifying that Delta will become Riyadh’s exclusive partner in North America and Riyadh Delta’s exclusive partner in the Saudi capital “and beyond.”
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