Delta Air, Riyadh Air unveil strategic partnership

By Rajesh Kumar Singh

CHICAGO (Reuters) -Riyadh Air has partnered with U.S. carrier Delta Air Lines as the Saudi startup carrier grows its potential network ahead of launching commercial operations next year, the airlines said on Tuesday.

Riyadh Air, owned by Saudi sovereign wealth fund PIF, will be a second national airline, based in the capital Riyadh, alongside existing flag carrier Saudia, based in Jeddah.

Under the agreement, Atlanta-based Delta will serve as Riyadh Air's exclusive partner in North America, offering its customers access to hundreds of U.S. destinations.

For Delta's customers, the partnership will open new destinations in Saudi Arabia, the airlines said. The U.S. carrier also plans to launch future nonstop service to Riyadh.

Currently, no U.S. airline files to Saudi Arabia.

Delta's first partnership with a Gulf carrier marks a shift from the last decade when the Atlanta-based airline along with United and American Airlines lobbied to curb competition from Gulf state carriers.

In 2022, however, United unveiled a codeshare agreement with Dubai's Emirates. American Airlines has a similar arrangement with Qatar Airways.

The tie-up between Delta and Riyadh Air envisions codesharing, which will allow them to sell seats on each other's flights, but will require regulatory approvals.

In the future, the two carriers plan to expand the partnership into a joint venture, allowing collaboration on network planning. Such an arrangement would require immunity from antitrust laws.

Currently, Delta has joint ventures with Air France-KLM, British airline Virgin Atlantic, Chile's LATAM Airlines and Korean Air.

Riyadh Air is trying to build its network through a series of bilateral partnerships and code shares rather than relying purely on its own planes, or joining a formal airline alliance.

Last month, it announced partnerships with Singapore Airlines and Air China.

(Reporting by Rajesh Kumar Singh; Editing by David Gregorio)