Air Arabia enters JV to launch new KSA low-budget carrier

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What we're tracking today

TODAY: Air Arabia enters JV to launch KSA budget carrier

Good morning, nice people. We’re officially deep into the summer news cycle slowdown, but we have an aviation update on Air Arabia’s plans to boost KSA’s eastern province connectivity along with a potential switch in Houthi targeting tactics on Red Sea waters. Let’s dive right in.

WATCH THIS SPACE-

#1- Elon Musk-backed AI firm xAI is reportedly in discussions with Abu Dhabi’s G42 to lease data centers, Bloomberg reports, citing sources familiar with the matter. Although specific details of the agreement remain undisclosed, the sources said that xAI's team is in contact with both G42 and two other potential partners in Saudi Arabia.

Ring a bell? The startup is reportedly weighing a long-term proposal for several gigawatts from PIF-backed Humain — whose infrastructure is not yet built — against a more short-term agreement for a 200 MW facility already under construction by an unnamed company.

#2- Egypt is eyeing a chemical storage and export hub in Libya to double its Tripoli-bound annual exports to USD 550 mn within its first year of operation, Chemical and Fertilizers Export Council President Khaled Abu Al Makarem told Al Arabiya. The first phase of the proposed hub is reported to span 8k meters — including large warehouse facilities designed to house chemical goods and fertilizers vital for building materials, in a bid to streamline trade between the two countries.

Trade in numbers: Egypt’s chemical exports to Libya settled at USD 272 mn last year — with plastic products leading the sector at USD 103 mn, followed by ink and paint products at USD 94 mn, detergents at USD 36 mn, glass at USD 13 mn, and fertilizers at USD 11 mn.

#3- GCAA orders Boeing inspections: The UAE’s General Civil Aviation Authority (GCAA) instructed national airlines to inspect fuel supply switches on their fleets’ Boeing 737 and 787 aircraft, The National reported on Thursday. The order comes after a preliminary investigation into last month’s fatal Air India crash found that fuel had been cut off from the engine shortly after takeoff, Reuters reported last week. The findings prompted Etihad Airways to pull an India-bound jet mid-flight back to Abu Dhabi for inspection, The Independent reported.

Regional airlines line up for check-ups: Etihad, Saudia, and Oman Air have all completed precautionary inspections of their 787 wide-body fleet, with Oman Air currently finalizing check-ups of its 737s. Flydubai has also launched precautionary inspections of its narrow-body 737s' fuel switches, a spokesperson told the National on Thursday.

#4- Aviation second wind boosts GE’s forecasts: General Electric (GE) has raised its full-year forecast — exceeding Wall Street’s predictions for 2Q 2025’s bottom line — after rebounding demand for aviation mitigated the effects of a potential global trade war, Bloomberg reported last week. GE now expects higher adjusted earnings for 2025, projecting USD 5.60-5.80 per share, an increase from their previous forecast of no more than USD 5.45.

IN CONTEXT- GE Aerospace announced a 30% increase in top line performance in 2Q, despite widespread market volatility, the news outlet reported. One big victory came as Qatar Airways ordered 400 engines from the company earlier this year, its largest wide-body sale to date.

MARKET WATCH-

#1- Oil prices slightly changed in early morning trading as traders evaluate the impact of US sanctions on Russian oil supplies, Reuters reports. Brent crude futures increased by USD 0.06 to reach USD 69.34 a barrel by 03.44 GMT, while US West Texas Intermediate (WTI) futures rose USD 0.17 to trade at USD 67.51 a barrel.

Saudi Arabia’s seaborne oil exports averaged 6.43 mn bbl / d in the first half of July, potentially marking a 16-month high if the pace holds, according to preliminary data from Bloomberg. However, the figures are based on only two weeks of data, and the final monthly average may be lower. The elevated shipments likely reflect the tail end of June’s production increase and the Kingdom’s increased output quota under its July Opec agreement.

The increased shipments were mostly Asia-bound: Exports to China rose to 2.1 mn bbl / d, and if sustained, would mark the highest monthly level since the production surge of April 2020. Shipments to India also climbed and could reach their highest level since December 2022. Meanwhile, flows to Egypt’s Sumed pipeline fell to their lowest level YTD.

REMEMBER- Opec’s latest report kept Saudi Arabia’s June production within its quota by citing a figure just shy of 9.4 mn bbl / d, using a “supply-to-market” metric instead of the usual wellhead production figures. The change followed a request from the Energy Ministry and stated that the extra oil produced due to geopolitical tensions went into storage and did not reach the market.

#2- Baltic index continues upwards trajectory: The Baltic Exchange’s dry bulk sea freight index — which tracks rates for the capesize, panamax, and supramax vessel segments — climbed 1.1% to 2,052 points on Friday. The capesize increased 2.1% to 3,084 points, while the panamax index dipped 0.7% to 1,919 points. The smaller supramax index rose 0.8% to 1,346 points.

#3- The Drewry World Container Index fell by 2.6% to USD 2,602 per 40-ft container on Thursday, according to the latest index readings. The drop comes on the back of market turbulence driven by US tariffs rolled back in April. The container forecaster projects the supply-demand balance to fall in 2H 2025 — causing spot rates to fall.

PSA-

Maersk to roll out PSS: Shipping giant Maersk has revised its peak season surcharge (PSS) for cargo travelling from the Middle East and the Indian subcontinent to the US and the Canadian East and Gulf coasts, according to a statement released on Friday. A USD 1k PSS applies for 20-40 ft dry containers and 40-45 ft high cube dry containers, whereas all 20 ft reefer containers and 40 ft high cube reefer containers will incur a USD 300 surcharge. The hike is effective 18 July until 15 August, and impacts shipments originating from the UAE, Yemen, Oman, Iraq, Kuwait, Jordan, Saudi Arabia, Qatar, and Bahrain.

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CIRCLE YOUR CALENDAR-

Mozambique will host Intermodal Africa on Tuesday, 22 July and run till Thursday, 24 July in Beira. The forum will host over 300 senior government officials, industry leaders, academics, senior executives, and harbor masters in the ports, shipping, and logistics sector. Attendees and speakers will be coming from countries across the Middle East, Africa, and Europe.

Oman will host Transport Middle East on Monday, 1 September and run till Wednesday, 3 September in Salalah. The conference will host 35 international speakers and over 50 exhibitors from the maritime sector to discuss global transportation and logistics.

Saudi Arabia will host the Sustainable Maritime Industry Conference on 3-4 September at the Ritz-Carlton Hotel in Jeddah. The event is set to gather over 60 speakers and more than 3k participants to discuss maritime decarbonization, digital transformation, regulatory frameworks, capacity building, and sustainable practices.

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

Air Arabia enters JV to boost KSA’s eastern region connectivity

Air Arabia joint venture to head new Saudi low-cost airline: Saudi Arabia's General Authority of Civil Aviation (GACA) has granted a license to operate a new budget carrier in an Air Arabia-led alliance — set to be headquartered at Dammam’s King Fahd International Airport (DMM), GACA said in a statement on X. The new airline — a joint venture between UAE’s Air Arabia, Jeddah-based Kun Investment, and Saudi’s Nesma Holding — is set to operate domestic and international flights from DMM. The investment figure or a timeline for the launch of the airline was not disclosed.

What's in the cards? The new airline aims to add 45 aircrafts to its fleet — serving 24 domestic and 57 international destinations by 2030. It aims to transport up to 10 mn passengers annually by the end of the decade as well generate nearly 2.4k direct jobs. The move looks to bolster air connectivity and accessibility for the Kingdom’s Eastern region.

Big things are cooking for Eastern Province airports: GACA launches SAR 1.6 bn Dammam airports strategy — which includes 77 infrastructure projects aimed at bolstering passenger experience and operational efficiency, according to a statement on X. The funding will be plugged into new master plans for King Fahd International Airport, Al-Ahsa Airport, and Al Qaisumah International Airport. The new plan aims to facilitate over 19.3 mn passengers annually at King Fahd International airport and air cargo capacity to over 600k tons per year by 2030.

IN OTHER AVIATION NEWS-

Bahrain’s flag carrier Gulf Air has inked a USD 4.6 bn agreement with Boeing to purchase up to 18 787 Dreamliners, Bahrain News Agency (BNA) reported last week. The carrier agreed to purchase 12 787 jets with an option to add six more, raising its firm order book for this model to 14, according to a statement published last week. The move is expected to expand Gulf Air’s international network and increase passenger capacity by 20%.

Things changed: An agreement for 12 Boeing 787 jets with an option for six more — along with 40 General Electric (GE) engines — was valued at USD 7 bn, Reuters reported last week.

There’s more: Gulf Air signed an MoU with the US planemaker to examine the potential of local maintenance, repair, and overhaul in Bahrain, BNA reported.

GE Aerospace was also tapped for business: The Bahraini carrier also inked an MoU with GE Aerospace to obtain 36 aircraft engines for the upcoming order, Al Arabiya reported last week. This move marks Gulf Air stepping away from Rolls Royce-made engines currently used in its twin-aisle jets, Bloomberg reported, citing unnamed sources.

Houthi attacks could have a major ripple effect on Israeli shipping, Windward says

Houthis recent attacks suggest the group is now adopting a broader strategy to its selection of targeted vessels, potentially putting one out of every six ships at risk of future attacks, according to maritime advisory outfit Windward. Following the group’s attack on the Magic Seas vessel this month, the Houthis spokesperson Yahya al-Sarea said the vessel was targeted because its owner also operates ships calling on Israeli ports, The New York Times reports. Initial reports of the attack were unable to pinpoint why the vessel was targeted despite the lack of Israeli ports calls linked to its name.

Is Israel already feeling the heat? The strategy could reshape the maritime ins. market for Israel-linked shippers as ins. providers mull severing war risk coverage for vessels that are indirectly linked to Israeli ports, the Middle East Eye reported last week, citing two unnamed sources in the shipping industry. “Vessels are going to start to avoid calling at Israeli ports. It's not about getting hit by the Houthis, but the chance of not being insured,” a maritime security official told Middle East Eye.

A case in point: Travellers — the Eternity C vessel’s ins. provider — refused to extend “war risk” protection prior to the ship’s Red Sea voyage, resulting in a steep loss for the ship’s owners after the Houthi attacks — Greece’s Cosmoship Management. This could sway shippers to wash their hands of any association with Israeli ports to ensure they could clinch insurance prior to Red Sea trips, Middle East Eye reports.

IN OTHER RED SEA UPDATES-

Filipino-crewed ships ordered to avoid Red Sea: A government advisory from the Philippines’ Department of Migrant Workers (DMW) has ordered shipowners to reroute vessels manned by Filipino crew to avoid the Red Sea and the Gulf of Aden, according to a statement (pdf) published last week. The move follows a Houthi attack on the Eternity C vessel earlier this month, whose crew included eight Filipinos, the Associated Press reported at the time.

The impact: Given that up to 30% of the world’s seafarers are reportedly Filipino, the move could “seriously reduce the number of vessels willing and able to sail through the Middle East region, and place further strain on regional and global trade,” Dubai-based maritime lawyer Cameron Livingstone told Arabian Gulf Business Insight last week. The DMW has the authority to punish Filipino labor agencies that do not comply with the advisory, according to the news outlet.

Sanad sees revenues jump 39% y-o-y in 1H 2025

Mubadala’s aerospace engineering and leasing arm Sanad Group reported 39% y-o-y growth in its top line to reach AED 3.2 bn in 1H 2025, according to a press release (here and here). The robust performance was driven by the company’s maintenance, repair, and overhaul (MRO) and asset management segments.

Operational highlights: The firm’s orderbook swelled to a record AED 38 bn — out of which AED 5 bn were added in 1H 2025 as long-term agreements, the press release said. Sanad’s MRO division processed 90 engines during the period and is expected to process up to 210 by year-end, a 30% y-o-y increase from 2024. This growth was supported by Sanad both becoming the first Pratt & Whitney GTF MRO network provider in the SAMENA region and finalizing a handful of MRO services agreements with global aviation players.

REMEMBER- Sanad enhanced its asset management portfolio in 1H 2025 by acquiring a batch of Rolls-Royce Trent 700 engines from Etihad Airways after the carrier retired its A330neo fleet.

Sanad’s MRO expansions come on the back of a growing global MRO market, which reached over USD 114 bn in 2024, according to data from consulting outfit Oliver Wyman. Aging fleets, aircraft malfunctions, and jet delivery delays were among the top growth drivers in the MRO market, while materials shortages were the primary disruptor for the aviation industry, according to a survey by the firm. MRO market growth is expected to grow annually by a steady average of 2.7% to reach USD 156 bn in 2035.

Updates on storage, ports, customs, and aviation from the UAE, Qatar, Morocco, and Oman

STORAGE + WAREHOUSES-

Morocco, Boeing to establish aerospace centers: Moroccan investment management firm Alphavest Capital inked an MoU with Boeing to set up five aerospace centers of excellence (COEs) in Morocco, according to a statement released on Friday. The five centers will focus on engineering airport transport systems; tubes, ducts, hoses, and fittings; aircraft standard machine parts and sheet metal; secondary aircraft structures, especially composite parts; and metal processing and distribution.

SOUND SMART- Aerospace COEs are dedicated entities that cooperate with firms or institutions on certain focus areas within the aerospace industry. The US Federal Aviation Administration ’s COE program facilitates cooperation between government entities and academic institutions to develop research and manufacturing capabilities, providing grants for related projects.

EQUIPMENT-

DP World launches Philippines’ first e-ITV fleet: The UAE’s DP World and Asia Terminals Inc (ATI) have rolled out a PHP 120 mn (c. USD 2.1 mn) fleet of electric internal transfer vehicles (e-ITV) and rapid-charging capacities at the Philippines’ Manila South Harbor, according to a press release last week. The harbor’s 15 e-ITVs — making up 20% of the current fleet — will enhance terminal efficiency and vessel turnaround time by streamlining container transportation and accelerating the transition to a fully-decarbonized fleet by 2030. The eITVs were manufactured by China’s Sany Heavy Industry, the press release said.

The investment is part of DP World and ATI’s USD 100 mn project to upgrade the Manila South Harbor, which was announced last May, the press release said. The project features an extension of the terminal Pier 3’s berth to over 600 meters and an expansion of the existing yard to accommodate 20k TEUs.

CUSTOMS-

GCC + Malomatia partner on digital data platform: The GCC Customs Union Authority inked an agreement last week with Doha-based IT services and consulting firm Malomatia to establish a digitally-accessible customs data-exchanging platform across all GCC countries, according to a statement last week. The platform aims to increase the efficiency of customs operations by facilitating data exchange within the region and across its borders.

AVIATION-

Oman eyes Wizz Air partnership after UAE exit: State-owned firm Oman Airports is in talks with Wizz Air to debut direct flights from Europe to Oman — including from Budapest — after the Hungarian budget suspended its Abu Dhabi operations last week, CEO Ahmed Said Al Amri told Oman News Agency on Saturday.

More in the pipeline: The firm is considering new direct services with Lot Polish Airlines and is in discussions with China to implement a direct flight to Muscat from Shanghai or Guangzhou through China Eastern Airlines, according to a separate Times of Oman report. Oman Airports also inked an MoU with Malaysia-based WCT Holdings Berhad — the engineering and construction arm of WTC Group — to share expertise and explore investments on projects within Muscat International Airport, the Oman Observer reported last week.

Beijing threatens to obstruct Panama port sale + China’s shipbuilding orders take a hit

China demands Cosco involvement in Panama ports: China has threatened to obstruct the Panama ports agreement if its state-owned shipping firm Cosco Shipping does not receive an undetermined stake, Reuters reported on Thursday, citing a Wall Street Journal report. All concerned firms — Hong Kong-based CK Hutchinson, Blackrock, and Mediterranean Shipping Company — are on board with Cosco taking a stake.

What’s the problem? The involved firms will not have enough time to reach a final decision on Cosco’s stake before the 27 July negotiations deadline. The sale follows heavy US pressure on Panama to push out CK Hutchinson, with the US striving to control the canal after alleging that Panama is enabling Chinese interference in the area.

Not China’s first overrule: Its top antitrust watchdog, the State Administration for Market Regulation, previously blocked CK Hutchison from selling its two ports in the Panama Canal in April.

Chinese shipbuilding orders declined 68% y-o-y to 26 mn deadweight tonnage (dwt) in 1H 2025, following anticipated US Trade Representative (USTR) fees on Chinese-built ships stopping in US ports, Splash reported on Thursday, citing data from shipping solutions agency Clarksons. The nation’s shipbuilding contracts also dipped from 72% to 52% during the same period, while China’s share of global orders rose from 56% to 75%.

Disappointed, not surprised: The levies imposed on China-built vessels — including an expected USD 1-3 mn surcharge for shipments on certain transatlantic trips — are likely to shift the market share away from China to markets with production capacity, such as South Korea and Japan.

As for its Asian rival: South Korea's share of global new orders climbed from 14% to 30%, while orders at South Korea’s yard slightly dipped 7% y-o-y to 14.2 mn dwt in the same period. These numbers parallel previous forecasts that projected South Korean and Japanese shipbuilders as the biggest beneficiaries of the US’ crackdown on China’s shipbuilding industry.

Targeting China: The USTR will impose fees on Chinese-built vessels calling at US ports, calculated based on net tonnage or containers loaded. These fees are effective 14 October, starting at USD 50 per ton for Chinese-owned and operated ships and increasing by USD 30 per year over the next three years — capping at USD 140 by 2028.

Calendar

JULY

22-24 July (Tuesday-Thursday): Intermodal Africa, Beira, Mozambique.

AUGUST

25-29 August (Monday-Friday): Africa Procurement & Supply Chain Leaders’ Conference (APSC), Dubai, UAE

SEPTEMBER

1-3 September (Monday-Wednesday): Transport Middle East 2025, Salalah, Oman.

3-4 September (Wednesday-Thursday): Sustainable Maritime Industry Conference, Jeddah, Saudi Arabia.

4-10 September (Thursday-Wednesday): Intra-African Trade Fair, Algiers, Algeria.

7-10 September (Sunday-Wednesday): Comex Global Technology Show, Muscat, Oman.

15-16 (Monday-Tuesday) September: Smart Ports & Logistics Transformation Summit, Jeddah, KSA

24-26 September (Wednesday-Friday): Routes World, Hong Kong.

25 September (Thursday): World Maritime Day 2025.

30 September-2 October (Monday-Thursday): Global Rail Transport Infrastructure Exhibition and Conference, Abu Dhabi, UAE.

OCTOBER

The International Maritime Organization (IMO) is set to formally adopt the Net-zero Framework this month, stipulating new fuel standards for ships and a global pricing mechanism for emissions.

1-2 October (Wednesday-Thursday): Saudi Maritime & Logistics Congress, Dammam, Saudi Arabia.

7-8 October (Tuesday-Wednesday): Global EV & Mobility Technology (GEMTECH) Forum, Riyadh.

13-17 October (Monday-Friday): The Marine Environment Protection Committee’s second extraordinary session, London, UK.

14-15 October (Tuesday-Wednesday): Investing in Africa Conference and Expo, London, UK.

15 October (Wednesday): Global Trade Review, Cairo, Egypt

28-30 October (Tuesday-Thursday): Borneo International Maritime Week, Sarawak, Malaysia.

NOVEMBER

3-6 November (Monday-Thursday): ADIPEC Maritime and Logistics Exhibition and Conference, Abu Dhabi, UAE.

4-6 November (Tuesday-Thursday): Air Cargo Forum, Abu Dhabi, UAE.

9-11 November (Sunday-Tuesday): TransMea Expo, Cairo, Egypt

17-21 November (Monday-Friday): Dubai Airshow, Dubai, UAE.

24-26 November (Monday-Wednesday) The World Advanced Manufacturing & Logistics Saudi Expo, Riyadh, Saudi Arabia.

DECEMBER

1-3 December (Monday-Wednesday): INTRALOGISTICS Powered by CeMAT, Riyadh, KSA

15-16 December (Monday-Tuesday): Supply Chain And Logistics Conference 2025, Riyadh, KSA.

2026

27-29 January (Tuesday-Thursday) Transport Middle East 2026, Abu Dhabi, UAE.

4-5 February (Wednesday-Thursday): Breakbulk Middle East, Dubai, UAE.

28-30 April (Tuesday-Thursday) Mediterranean Ports and Logistics, Porto, Portugal.

12-13 May (Tuesday-Wednesday): IntraLogistex, Abu Dhabi, UAE

24-26 June (Wednesday-Friday) Transport Logistic & Air Cargo 2026, Shanghai, China.

7-9 July (Tuesday-Thursday) Asean Ports and Logistics, Kuala Lumpur, Malaysia.

17-19 November (Tuesday-Thursday) Intermodal Africa 2026, Luanda, Angola.

UN Trade and Development Global Supply Chain Forum to take place in Saudi Arabia.

2027

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

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