Europe's Wizz Air considering a Saudi operating license

© Reuters. FILE PHOTO: People stand next to a Wizz Air aircraft at Ferenc Liszt International Airport in Budapest, Hungary, August 18, 2022. REUTERS/Bernadett Szabo

RIYADH (Reuters) -European budget carrier Wizz Air is considering basing an airline in Saudi Arabia as part an agreement signed with the government this year to develop the kingdom's aviation sector, its chief executive said in an interview on Thursday.

Wizz Air, which said in May it would explore opportunities in Saudi Arabia, announced on Thursday it was launching direct flights to Riyadh, Jeddah and Dammam from 11 European cities starting early next year, including from Rome, Milan and Vienna.

"The scope of ... exploring opportunities in the country may go beyond being an inbound carrier and may also involve making direct investments," CEO Jozsef Varadi told Reuters from Riyadh.

He said that included considering applying for an Air Operator's Certificate (AOC) in Saudi Arabia to base an airline there, without saying when a decision could be made on the AOC.

A Saudi license could allow a subsidiary or joint venture to operate domestic services in the kingdom, which has a population of about 36 million. It could also operate international flights that start in Saudi Arabia, opening up access to new markets.

Wizz Air, whose main operations are in central and eastern Europe, has AOCs in Hungary and the United Kingdom. Wizz Air Abu Dhabi, a branded joint venture between the airline and an Abu Dhabi sovereign wealth fund, has a United Arab Emirates AOC.

Saudi Arabia liberalised its tourism industry in 2019, aiming to make it significantly easier for foreigners to visit the kingdom, which had been relatively closed off for many decades.

The move to open up the country is part of a push under its de facto ruler, Crown Prince Mohammed bin Salman, to develop the economy into a regional trade hub and lessen its dependence on oil.

"This country is on the move. The country is transforming itself. It's very ambitious ... we want to be part of it," Varadi said.

He also said despite there being a significant commercial risk in launching the flights, he believed there would be strong demand for travel from Europe to Saudi Arabia, and from the kingdom to Europe.