Saudi to build new regional cargo airline + Qatar Airways buys into South African airline

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What we're tracking today

TODAY: KSA’s sovereign wealth fund plans new freight airline to take on rival Gulf airlines

Good morning, friends. It’s a busy day for news in the regional logistics industry with Saudi and the aviation sector dominating headlines. Saudi Arabia’s sovereign wealth fund is looking to build a new cargo airline as it mounts a challenge to carriers in the UAE and Qatar. Contracts are being awarded for Saudi’s new King Salman International Airport, and Qatar Airways is looking to expand its presence in Africa with a 25% stake in South Africa’s Airlink. Meanwhile, Saudi shipping outfit Bahri is pushing ahead with its fleet modernization plan with a big USD 1 bn agreement that will see it buy nine oil tankers.

^^ We have all of this and more below.

WATCH THIS SPACE-

#1- KSA’s PIF has a new air cargo airline the works: The Public Investment Fund (PIF), Saudi Arabia’s sovereign wealth fund, is reportedly talking with Boeing and Airbus to acquire cargo aircraft as it looks to build form a new national air cargo company, Bloomberg reported, citing sources it says were of the know. The move looks to boost the Kingdom’s logistics capacity, in means of rivaling Gulf airlines Emirates and Qatar Airways, according to the business newswire. Reuters also picked up the story.

The state of play: PIF aims to buy Boeing 777 and Airbus A350 freighters, either from the manufacturers themselves or from lessors, the sources said. The planned cargo carrier will serve cargo for both Saudia and newly formed Riyadh Air, they added. The talks remain preliminary with no final decisions made, according to Bloomberg.

How other Gulf airlines are faring: Emirates’ cargo arm Emirates SkyCargo placed last month a USD 1 bn order for five Boeing 777 freighters, slated for immediate delivery between 2025 and 2026. Emirates has 14 freighters in its fleet while Qatar Airways has 28 freighters, according to Bloomberg.

It’s part of a big Saudi push into air transport that will see the launch of Riyadh Air as a new national flag carrier that will make Riyadh its home base while current national carrier Saudia relocates to Jeddah’s King Abdulaziz International Airport. PIF-owned Riyadh Air, announced in March 2023, will start operations in 2025 and has a target of operating flights between 100 destinations by 2030. Saudia would shift focus on transporting pilgrims to holy sites, while Riyadh Air will focus on tourists, including international transit passengers. Saudia placed earlier this year a USD 19 bn order with Airbus for 105 narrow-body aircraft in what stands as the largest order made in Saudi aviation history.

EnterpriseAM Saudi has previously noted that PIF wants to acquire Saudia in whole or in part and aims to take a stake in Saudi-owned budget carrier Flyadeal as part of the transaction.

#2- Four firms contracted to develop King Salman International Airport: PIF subsidiary King Salman International Airport Development Company (KSIADC) has inked a strategic partnership agreement with four international and local firms for the development of the planned King Salman International Airport in Riyadh, state news agency SPA reports. The airport is an expansion of the capital’s King Khalid International Airport.

Who's involved: International architecture firm Foster + Partners will draft the airport's master plan, which will include several terminals and six runways. Engineering outfit Jacobs will consult on the airport's runways and master plan. Consulting and construction company Mace will oversee planning and construction, while Saudi-based aviation operations solutions firm Nera will manage airspace design to streamline air traffic and boost capacity.

There’s a rough timeline for the project: Officials said in late June that they plan to open the airport’s private aviation terminal in 2026. The airport plans to introduce a new runway in 2027, a passenger terminal in 2028, and its “iconic terminal” by 2030, the airport’s acting CEO Marco Mejia said. Construction is set to continue until 2034, he added.

REFRESHER- Unveiled in November 2022, the airport is poised to be one of the world’s largest airports with an area spanning 57 square kilometers with six parallel runways. It is set to accommodate up to 120 mn passengers by 2030 and 185 mn travelers by 2050.

#3- Egypt is considering importing wheat from Turkey and exploring other sources, Asharq Business reports, citing comments by Hossam El Garhy, deputy chairman of state grain buyer General Authority for Supply Commodities (GASC). His statements come days after GASC purchased just 280k tons of wheat in a tender that aimed to secure some 3.8 mn tons. The tender was launched to capitalize on a dip in wheat prices, seeking to procure nearly a third of the country’s yearly requirement of the grain.

What can Turkey bring to the table? Turkey is not a major wheat exporter and still needs to import 8-9 mn tons annually to cover its own needs, a GASC wheat supplier told EnterpriseAM Egypt. Egypt imported a meager c. 7.1k tons of wheat from Turkey over the first seven months of the year — compared to none during the same period last year — a source at the Egyptian Supply Ministry told EnterpriseAM.

MARKET WATCH-

Baltic index sees upward tick: The Baltic Exchange’s dry bulk sea freight index — which tracks rates for the capesize, panamax, and supramax vessel segments — was up 1.6% to 1,735 points on Monday, driven by high capesize rates. Capesize gained 3.7% to a one-month high of 2,691 points, while the panamax index fell 1.5% to 1,521 points. The smaller supramax index inched up 4 points.

Oil prices slipped on Tuesday amid talks on a possible ceasefire in Gaza and concerns about economic weakness in China, Reuters reports. “If the market fundamentals don't break this bearish trend soon, OPEC+ may be hesitant to unwind their voluntary cuts anytime soon,” an analyst told the newswire. Brent crude futures had dipped 0.4% by EnterpriseAM Climate’s dispatch time this morning to USD 74.04 for October delivery, while the US West Texas Intermediate (WTI) eased was down just under 0.1% to USD 77.15 per barrel.

DATA POINTS-

#1- Egypt’s exports rose 12% y-o-y to USD 3.1 bn in July 2024, with total exports totalling USD 23 bn during the first seven months of the year, according to a statement by the General Organization for Export and Import Control (GOEIC). Imports rose 4% y-o-y to hit USD 6.5 bn in July, according to the statement.

Who is Egypt selling to? Arab countries accounted for 37.4% of Egyptian exports at USD 8.6 bn during January-July, followed by the EU at USD 5.9 bn, North America at USD 1.3 bn, and Africa at USD 1.2 bn over the same period.

What’s it selling? Building materials led the bulk of Egypt’s exports, accounting for USD 5.6 bn, followed by the chemical and fertilizer sector at USD 4.5 bn, and the food sector at USD 3.6 bn.

#2- July cargo volumes pick up at Jordan’s QAIA: Cargo volumes at Jordan’s Queen Alia International Airport (QAIA) rose by 32.1% y-o-y to 6.9k tons in July 2024, according to a statement. Overall QAIA has registered a 24.7% y-o-y increase to 45.3k tons of cargo over the last seven months.

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CIRCLE YOUR CALENDAR-

Saudi Arabia will host the Saudi Warehousing and Logistics Expo on Monday, 2 September to Wednesday, 4 September in Riyadh. The event will bring together leaders in the supply chain, warehousing, and logistics industry from across the Kingdom to discuss investments, trade, geopolitical risks, and localized manufacturing.

Egypt will host the Egypt International Airshow on Tuesday, 3 September to Thursday, 5 September in El Alamein. The event will host a range of discussions touching on industrialization, digitalization, and globalization in the regional commercial aviation sector. During the event, aircrafts and innovative aerospace products, and services will be showcased.

Saudi Arabia will host SkyMove MENA on Tuesday, 10 September and Wednesday, 11 September in Riyadh. The event will gather global industry stakeholders, experts, and service providers to discuss challenges in the regional aviation industry.

Saudi Arabia will host the Saudi Maritime and Logistics Congress on Wednesday, 18 September and Thursday, 19 September in Dammam. The event will gather international industry leaders in the maritime sector to discuss a range of topics including interconnected logistics, supply chains, digitalization, decarbonization and workforce development.

Check out our full calendar at the bottom of this email for a comprehensive listing of upcoming events and news triggers.

Bahri pushes with fleet modernization with USD 1 bn agreement for nine oil tankers

Bahri to acquire nine oil tankers for USD 1 bn: Saudi shipping giant Bahri inked an agreement to acquire nine very large crude carriers (VLCCs) from global shipping outfit Capital Maritime and Trading Corporation for SAR 3.75 bn (c.USD 1 bn), according to a disclosure on the Saudi Exchange (Tadawul) yesterday. The VLCCs will be used by Bahri’s oil transport business to transport crude oil cargoes to its customers. The national shipping company is partly owned by the Public Investment Fund (Saudi’s sovereign wealth fund) and oil giant Aramco.

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Ironing out the details: Capital Maritime and Trading Corporation will deliver the VLCCs to Bahri in multiple batches before the end of 1Q 2025. The Saudi firm will pay 10% of the total amount upon signing the purchase agreement, while the remaining 90% will be paid upon delivery of the vessels. The transaction will be financed by a combination of banking facilities and internally generated funds by Bahri, according to the disclosure.

About the vessels: The majority of the nine oil tankers are built in South Korea, Bahri said. The vessels are scrubber-fitted and equipped with high energy efficiency and low emission features to decrease environmental impacts. The average deadweight tonnage of each VLCC is around 311.5k.

Why this matters: Bahri says that the agreement will contribute to its fleet modernization plans, and will enable the company to phase out its older vessels. Bahri currently operates a fleet of 40 VLCCs with a 2.2 mn barrels capacity, according to the company’s website.

Bahri is all in for S. Korea VLCCs: Bahri reportedly bought four modern VLCCs in May from South Korean SM Group subsidiary Korea Line Corporation. No order ticket has been disclosed, but the four-year-old ships could have cost around USD 116 mn each.

Ambitious plans: Bahri said last month following its 2Q 2024 earnings that it plans to generate further growth through strategic fleet expansion and upgrades. Bahri and Saudi investment holding firm Aljan & Bros renewed earlier this year an MoU to discuss establishing a joint venture (JV) in vessel building. Bahri is also partnering with the Saudi Port Authority to establish a 95k sqm logistics center at Jeddah Islamic Port, which is expected to offer services including container maintenance, repair, cleaning, bonded storage, and haulage.

Qatar Airways acquires 25% stake in South Africa’s Airlink under Africa expansion

Qatar Airways has acquired a 25% stake in South African-based airline Airlink, the latest move as part of its expansion in Africa, it said in a statement yesterday. Qatar Airways didn’t say how much it had paid for the stake or give an indication of closing conditions or timeline. News of the state-owned Gulf carrier’s interested in Airlink first surfaced last month. The story is getting ink this morning from Reuters | Bloomberg | Associated Press.

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The agreement will give Qatar Airways access to passengers from regional cities in Africa and to direct more traffic through Doha. Airlink has a fleet of more than 65 aircraft and transports more than 3 mn passengers per year to over 45 destinations in 15 sub-Saharan African countries.

Big moves in the continent: “Africa is very important for us . . . Africa represents 18 percent of the world population, and it is really underserved as a continent,” Qatar Airways CEO Mohammed Al Meer told the Financial Times yesterday. The Gulf carrier — which operates flights to 29 destinations in Africa — is also “working very closely to finalize” its much-anticipated acquisition of 49% of Rwanda’s national carrier, RwandAir. Stake purchases in both Airline and RwandAir would represent the “last part of the equation” in Qatar Airways’s planned expansion in Africa, according to the CEO.

Appetite for more? “We already have a big basket of investments…we will not shy away from investing in other airlines if we see there is potential to collaborate and work together,” Al Meer told FT, without providing further details.

ICYMI- Qatar Airways acquired a 60% stake in a USD 1.3 bn international airport development in Rwanda back in 2019, which is slated for completion in 2027. It also inaugurated its first cargo hub outside of Qatar last year at Kigali International Airport in Rwanda in partnership with RwandAir.

QATAR STEPS UP FLIGHTS TO FOUR DESTINATIONS

MEANWHILE- Qatar Airways will put on new flights to key destinations: Qatar Airways is launching extra flights to key destinations including London (from 27 October), the Maldives’ Male (from 13 December), Miami (16 December onward), and Tokyo (starting 14 February 2025), the company said in a statement.

Fintech and logistics startup PostEx closes USD 7.3 mn pre-series A round with eye on GCC expansion

Pakistan’s PostEx closes USD 7.3 mn pre-series A round: Pakistan-based fintech and logistics company PostEx secured USD 7.3 mn in pre-series A funding round, according to a press release (pdf). The funding round was led by Dubai-based Conjunction Capital, seeing participation from Jordan’s Dash Ventures, and Saudi Arabia’s Sanabil500. The investment will allow PostEx to expand its operations in the GCC and double down its presence in Pakistan, according to the statement.

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Investors ❤️ PostEx: The startup raised USD 1.5 mn in a previous seed round in 2021, bringing the total amount secured in funding to USD 8.8 mn, led by MSA Capital. Shorooq Partners, Zayn Capital, VentureSouq, PNO Ventures, +92 Ventures, and Arbisoft’s CEO Yasser Bashir also participated in the funding round.

PostEx is focusing its GCC expansion drive on the UAE and Saudi Arabia, PostEx CEO Omer Khan told EnterpriseAM UAE. The company launched a pilot in Saudi Arabia with online merchants and local financing partners to fine-tune its offering before a full market entry. In the UAE, PostEx will adopt a more measured approach, prioritizing e-commerce financing over logistics due to the sector’s maturity in the Emirates, Khan said.

More on PostEx: The Punjab-based company offers up-front payments for cash-on-delivery e-commerce orders placed by suppliers, supported by a nationwide logistics network. PostEx serves 15k e-commerce merchants, with 80% using both its payment and logistics solutions, while the rest rely solely on its logistics services, according to Khan.

PostEx provides funding exclusively to e-commerce businesses that use its logistics network, a strategy that helped to maintain the company’s non-performing loan rate below 0.03%, according to Khan. The company covers around 60-70% of order values, with the remaining balance provided after delivery and payment. Financing levels are determined by the size of the business and the scale of its orders.

Egypt, EU sign agreement to boost trade with EUR 8 mn commitment

TRADE-

#1- Egypt + EU ink agreement to boost trade: The Egyptian government signed an executive five-year agreement with the EU’s Tigara program to improve and develop the efficiency of the country’s trade and boost the involvement of Egyptian SMEs in industrial value chains, according to a statement. The initiative, backed by EUR 8 mn in EU funding, aims to support trade, industry, growth and rapid market access. The UN Industrial Development Organization will implement the agreement, which aims to increase the competitiveness of the Egyptian private sector, according to the statement.

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#2- Dubai Chambers + Industrial and Commercial Bank of China to help Chinese companies set up shop in Dubai: The Dubai Chambers and the Industrial and Commercial Bank of China have signed an MoU to develop a framework to help the bank’s customers establish businesses in Dubai, Wam reported yesterday. Under the MoU, the two sides will also work to promote collaboration between companies in Dubai and China to boost bilateral trade.

PORTS-

#1- Egypt’s New Suez Canal in talks to finance the development of the East Qantara Port: New Suez Canal for Dry Ports and Logistics Services is in talks with entities that include the National Initiative for Developing Egyptian Industry (Ebda) over financing the superstructure of the East Qantara Dry Port, Al Borsa reports, citing sources familiar with the matter. Should Ebda agree to fund the project, it will likely be done through a capital increase, with New Suez Canal prepared to offer a 25% stake in the port to the investor, the sources reportedly said.

The company has already fully completed the infrastructure of the port at a cost of EGP 500 mn, and is looking to secure an additional EGP 500 mn for further development, according to Al Borsa. The East Qantara Dry Port had been slated to kick off trial operations in late April, after plans to establish the port were approved by the Egyptian cabinet in November of last year.

#2- Oman’s KDP + DHL to provide LCL services: Oman’s Khazaen Dry Port (KDP) has inked a strategic agreement with DHL to provide less-than-container-load (LCL) services at the port’s container freight station, Oman Observer reports. Under the partnership, DHL will oversee container handling, unloading, and warehousing goods, and the port will serve as a last-mile hub for DHL’s Oman-based LCL customers.

STORAGE + WAREHOUSES-

Adnoc + Petronas + Storegga want to set up CCS in Malaysia: The Abu Dhabi National Oil Company (Adnoc) has inked a joint study and development agreement with Malaysian energy outfit Petronas and UK-based Storegga to assess the feasibility of setting up carbon capture and storage (CCS) sites in Malaysia, according to a press release. The agreement is targeting at least 5 mn tonnes per annum of CCS capacity by 2030. It also includes a CO2 shipping and logistics study, geophysical and geomechanical modeling, and the application of advanced technologies including artificial intelligence to improve storage capacity. The agreement’s activities are set to begin later this year.

OTHER STORIES WORTH KNOWING THIS MORNING-

Milaha’s July shipments: Qatar Navigation (Milaha) delivered 13.7k tons of cargo and 2.8 mn liters of fuel in July. (Statement)
KSA + Uruguay to set up joint business council: The Federation of Saudi Chambers and the Uruguay Exporters Association have signed an MoU to establish a joint business council. (SPA)

China’s steel production forecast to continue to drop, while exports grow

China’s steel output outlook looks bleak: China’s steel production dropped 9.5% m-o-m to 82.94 mn metric tons in July and is expected to continue to decline in the coming month as demand slows and government operational guidance limits production, Reuters reported yesterday, citing official data by the Chinese government. The government has encouraged an informal cap on production to cut down on carbon emissions.

A silver lining: Although the nation’s production was down 2.2% y-o-y to 613.7 mn tons in the first seven months of this year, steel exports were up 21.8% y-o-y, reaching 61.23 mn tons.

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MEANWHILE- Suspected toxic waste returning to Europe: German shipping giant Maersk is returning to Europe hundreds of tons of alleged industrial waste it had picked up from Albania and sailed to Southeast Asia, Bloomberg reported. Albanian officials have said they are investigating how 800 tons of suspected industrial waste were shipped from its port without authorization. The shipping outfit is currently working with Singaporean authorities and MSC to return the cargo to Albania.

Where is the waste coming from? The waste is suspected to have come from international companies operating near a metallurgical complex in Elbasan in Albania.

Calendar

AUGUST

21-22 August (Wednesday-Thursday): Rex Fuels Global Expo & Conference 2024- Bitumen, Petrochemicals & Products, Dubai, UAE.

SEPTEMBER

2-4 September (Monday-Wednesday): Saudi Warehousing & Logistics Expo, Riyadh, Saudi Arabia.

3-5 September (Tuesday-Thursday): Egypt International Airshow, El Alamein, Egypt.

10-11 September (Tuesday-Wednesday): SkyMove MENA, Riyadh, Saudi Arabia.

12 September (Wednesday): Deadline for companies to submit bids for expansion and operation of Baghdad’s International Airport.

18-19 September (Wednesday-Thursday): Saudi Maritime & Logistics Congress, Dammam, Saudi Arabia.

23-25 September (Monday-Wednesday): WorldFreezonesOrganization’s Annual International Conference and Exhibition (AICE), Dubai, UAE.

23-26 September (Monday-Thursday): Freight Summit Global Conference, Dubai, UAE.

25-26 September (Wednesday-Thursday): Global Aerospace Summit, Abu Dhabi, UAE.

30 September - 2 October (Monday-Wednesday): African, Middle East & Islamic Finance Aviation 100 Awards, Dubai, UAE.

OCTOBER

6-8 October (Sunday-Tuesday): Routes World 2024, Bahrain.

8-10 October (Tuesday-Thursday): The Global Rail Transport Infrastructure Exhibition and Conference(Global Rail), Abu Dhabi, UAE.

7-9 October (Monday-Wednesday): AFSIC – Investing in Africa, London, UK.

8-10 October (Tuesday-Thursday): AntwerpXL Expo, Antwerp, Belgium.

12-14 October (Saturday-Monday): Global Logistics Forum 2024, Riyadh, Saudi Arabia.

13 October (Sunday): International Transport Workers’ Federation (ITF) Congress, Marrakesh, Morocco.

16-17 October (Monday-Tuesday): Global Airport & Aviation Forum, Jeddah, Saudi Arabia.

21-22 October (Monday-Tuesday): Smart Ports & Logistics Transformation Summit, Riyadh, Saudi Arabia.

22-24 October (Tuesday-Thursday): Asean Ports and Logistics, Johor, Malaysia.

22-24 October (Tuesday-Thursday): Global Ports Forum, Singapore.

26-27 October (Saturday-Sunday): International Conference on Tourism, Transport, and Logistics, Dubai, UAE.

NOVEMBER

11-12 November (Monday-Tuesday): World Advanced Manufacturing Logistics Summit & Expo, Riyadh, Saudi Arabia.

11-12 November (Monday-Tuesday): Saudi Airport Exhibition, Riyadh, Saudi Arabia.

11-14 November (Monday-Thursday): ADIPEC Maritime and Logistics Exhibition and Conference, Abu Dhabi, UAE.

13-15 November (Wednesday-Friday): The Bahrain International Airshow, Sakhir Airbase, Bahrain.

18-20 November (Monday-Wednesday): The Heavy Equipment and Truck Show, Damman, Saudi Arabia.

19-21 November (Tuesday-Thursday): Saudi International Maritime Forum, Dammam, Saudi Arabia.

18-19 November (Monday-Tuesday): G20 Summit, Rio de Janeiro, Brazil.

20-21 November (Wednesday-Thursday): Saudi Rail Exhibition, Riyadh, Saudi Arabia.

DECEMBER

2-3 December (Monday-Tuesday) Wings of Change Middle East, Riyadh, Saudi Arabia.

10-11 December (Tuesday-Wednesday): Rail Industry Summit, Casablanca, Morocco.

10-12 December (Tuesday-Thursday): Middle East Business Aviation, Dubai, UAE.

20 December (Wednesday): The Iran-Senegal Joint Economic Cooperation Commission, Dakar, Senegal.

EVENTS WITH NO SET DATE

IATA Annual General Meeting (AGM) and World Air Transport Summit, New Delhi, India.

1H 2024: Civil Construction subcontracts for construction firms in Oman for implementation of the Abu Dhabi - Suhar rail link to be announced.

2H 2024: Bahri’s barges for Saline Water Conversion Corporation (SWCC) to begin initial and commercial operation.

King Salman Energy Park is set to become operational.

The Cross-Border Digital Trade Forum, Dubai.

2025

FEBRUARY

4-5 February (Tuesday-Wednesday): Seatrade Maritime Qatar, Doha, Qatar.

APRIL

16-17 April: Global Ports Forum, Dubai, UAE.

Mid-2025: Iraq will complete phase one of the construction of the Grand Faw Port.

DHL and Aramco’s logistics and procurement hub in Saudi Arabia will commence operations.

AD Ports-operated Safaga Port’s multi-purpose terminal will become operational.

Phase 3 of APM Terminals Tangier MedPort to be complete and operational.

1Q 2025: Sadr Park’s Logistics Center in Riyadh to be completed.

1Q 2025: Phase twoof Jafza Logistics Park to be completed.

NOVEMBER

4-6 November: The International Air Cargo Association TIACA’s Air Cargo Forum 2025, Abu Dhabi, UAE.

2026

2026 UNCTAD Global Supply Chains Forum, Saudi Arabia.

2027

4Q 2027: Oman’s Musandam Airport construction to be completed.

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