Delta Welcomes New Partner: Riyadh Air, a Saudi startup poised to compete with Emirates, Qatar, and Etihad.

Delta Air Lines is collaborating with Saudi Arabia's newest airline, establishing a significant U.S. partnership even before its inaugural flight.

Delta formalized a strategic agreement with Riyadh Air at its Atlanta headquarters on Tuesday, with the airline set to begin operations in 2025.

The memorandum of understanding lays the groundwork for a stronger alliance between the two airlines, described as "the foundation for a strategic partnership" in their joint announcement.

An extensive collaboration

The agreement between Delta and Riyadh outlines plans for future interline and codeshare arrangements, pending regulatory approvals, as stated by the companies.

They are also considering a potential joint venture, which would enable the airlines to collaborate on pricing, scheduling, and revenue-sharing. Delta currently has joint ventures with several major partners, including Korean Air, Air France-KLM, Virgin Atlantic, LATAM, and Aeromexico (although the latter is currently at risk of termination due to a dispute with the Biden administration).

The companies hinted at a future frequent flyer program that would likely utilize Delta's SkyMiles program, with intentions for "a deeper partnership involving loyalty" and other operational elements.

Direct flights to Saudi Arabia are in the works

As part of the agreement, Delta intends to introduce future nonstop flights to King Khalid International Airport (RUH) in Riyadh, the capital of Saudi Arabia, according to the companies.

Currently, no U.S. airlines operate flights to Saudi Arabia, making Saudia the sole airline providing regular service between the kingdom and the U.S., with nonstop routes to New York City, Washington, D.C., and Los Angeles.

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Tourism initiative supported by sovereign wealth fund

The partnership between Delta and Riyadh coincides with Saudi Arabia's significant tourism initiative, backed by billions from its Public Investment Fund aimed at diversifying the economy beyond oil.

Riyadh Air, which was established as a company last year, aims to rival major players in the Persian Gulf like Emirates, Qatar Airways, and Etihad. Its CEO, Tony Douglas, previously led Etihad.

Last year, the airline confirmed orders for 39 Boeing 787-9 Dreamliners, with options for an additional 33 aircraft.

Riyadh plans to begin operations by 2025 and aims to connect to 100 international destinations by 2030.

Delta isn't the first airline to partner with Riyadh; the new carrier has also established strategic agreements with Singapore Airlines and Turkish Airlines in recent months.

Delta secures a new partner in the Gulf region

In announcing the partnership with the Saudi startup airline, Delta CEO Ed Bastian emphasized the new options, advantages, and destinations available to customers.

"Crucially, Riyadh Air aligns with Delta's dedication to enhancing customer experience, which is why we're eager to develop and expand this collaboration in the coming months and years," Bastian stated.

It's important to highlight that Delta's strengthened alliance with the Saudi startup follows a decade of contention with major Gulf carriers over U.S. market access and alleged government subsidies provided to their competitors.

While the dispute eventually subsided, American Airlines chose to abandon its objections, opting instead to deepen its partnership with Qatar through the Oneworld Alliance, while United established its own agreement with Emirates, a competitor it had previously criticized.

Delta has kept its relationship with Saudia through the SkyTeam alliance, but its new partnership with Riyadh Air may provide a regional ally that aspires to rival the connectivity of more established Gulf carriers.

The agreement between Delta and Riyadh also features an exclusivity clause, ensuring that Delta will serve as Riyadh's sole North American partner, while Riyadh will be Delta's exclusive partner in the Saudi capital and beyond.