Saudi Arabia’s wealth fund eyes Flynas stake to bolster tourism

Saudi Arabia’s sovereign wealth fund is in talks to buy a stake in Flynas, a low-cost carrier that’s a key pillar of the kingdom’s attempts to bolster its tourism sector, according to people familiar with the matter.

Goldman Sachs Group is advising shareholders on the potential sale to the Public Investment Fund, the people said, asking not to be identified as the information isn’t public. The airline is partly owned by Prince Alwaleed Bin Talal’s Kingdom Holding Co., in which PIF bought a 17% stake last year.

Flynas had also been planning a potential listing, the people said, though this might be delayed if the stake sale to PIF goes ahead. The carrier has been weighing an IPO since 2008 and in 2018 hired Morgan Stanley, Citigroup Inc. and NCB Capital for a potential deal, Bloomberg News reported.

Flynas, Goldman Sachs and PIF declined to comment. Representatives for Kingdom Holding weren’t immediately available for comment.

Saudi Arabia has been pumping money into the aviation industry to make the country a top tourism destination as it diversifies away from fossil fuels. 

As part of these efforts, Flynas is establishing local units in two more countries and expanding its existing jet orders with the aim of becoming the Middle East’s biggest low-cost airline and one of the five largest globally.  

Saudi Arabia is also setting up an airline and building a new airport in the capital, both of which will be owned by PIF. The fund, chaired by Saudi Crown Prince Mohammed bin Salman, is a key part of the kingdom’s plan to transform the oil-dependent economy.