The UAE's carrier Air Arabia was among an alliance of three companies that won a bid to operate a new Saudi national low-cost airline, the Saudi General Authority of Civil Aviation said on Sunday.

The airline will operate with 45 aircraft serving 24 domestic and 57 international destinations, and transporting 10 million passengers by 2030. The new airline would operate flights from its hub at King Fahd International Airport in Dammam, with the aim of enhancing air connectivity in the Eastern Region, increasing seat capacity, and offering more competitive choices for passengers.

The Civil Aviation President, Abdulaziz Al Duailej, said that the new airline aims to enhance "air connectivity for the Eastern Region, increase seat capacity and to provide competitive travel options for passengers."

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The Kingdom’s Minister of Transport and Logistic Services Saleh al-Jasser said that the newly announced airline will “contribute to enhancing competition” and would provide more options for travellers. It would Also create over 2,400 job opportunities, the authorities said.

“We are proud to have been selected by the General Authority of Civil Aviation to launch a new national low-cost airline headquartered in Dammam," said Adel Al Ali, Group Chief Executive Officer of Air Arabia.

"As a leading low-cost airline operator in the region, this achievement represents a key milestone that reaffirms our commitment to supporting the growth and development of the Kingdom’s aviation sector. Through our proven economic model and regional expertise, this new partnership will deliver a reliable and value-driven travel experience for passengers and will contribute to economic growth and job creation in the Eastern Province and beyond," he added.

Saudi Arabia is ramping up it's aviation sector as the country looks to diversify the economy beyond oil, foster tourism, and position the Kingdom as a global aviation hub.

This expansion includes substantial investments in infrastructure and technology, with plans to channel $100 billion into the sector by 2030 and increase general aviation's contribution to GDP by tenfold to $2 billion by the same year.

In Match 2023, Saudi Arabia announced a new national airline, Riyadh Air, backed by the Public Investment Fund. Riyadh Air will will serve more than 100 destinations around the world by 2030, making use of the kingdom's location between Asia, Africa and Europe, state news agency SPA said.