Delta adds new partner: Riyadh Air, a Saudi startup aiming to rival Emirates, Qatar and Etihad

Delta Air Lines is joining forces with Saudi Arabia's newest airline in a pact that gives the young Gulf carrier a major U.S. partner even before launching its first flight.

Delta signed a strategic agreement at its Atlanta headquarters Tuesday with Riyadh Air, the kingdom's newest airline, which plans to commence operations in 2025.

The memorandum of understanding sets the stage for a deeper tie-up between the two airlines, serving "as the foundation for a strategic partnership," the companies shared in a statement announcing the news.

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A deep partnership

The agreement between Delta and Riyadh calls for future interline and codeshare agreements, subject to regulatory approvals, the companies noted.

They also plan to explore a future joint venture. Such arrangements typically allow airlines to coordinate on pricing, scheduling and revenue-sharing. Delta currently has joint ventures with several of its most prominent partner airlines, including major carriers such as Korean Air, Air France-KLM, Virgin Atlantic, LATAM and Aeromexico (though the latter agreement is currently at risk to end amid a dispute with the Biden administration).

The companies also teased a future frequent flyer arrangement that would likely leverage the power of Delta's SkyMiles program, noting plans for "a deeper partnership encompassing loyalty" and other operational components.

Nonstop Saudi Arabia flights planned

As part of the arrangement, Delta plans to launch future nonstop service to King Khalid International Airport (RUH) in Riyadh, the Saudi capital, the companies said.

No U.S. airlines currently fly to Saudi Arabia, and Saudi flag carrier Saudia is currently the only carrier flying regularly scheduled service between the kingdom and the U.S., with nonstop flights to New York City, Washington, D.C., and Los Angeles.

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Tourism push funded by sovereign wealth fund

The Delta-Riyadh ties come as Saudi Arabia is in the midst of a major tourism push, boosted by the hundreds of billions of dollars poured into its Public Investment Fund meant to diversify its economy beyond oil.

Riyadh Air, which launched as a company last year, seemingly hopes to compete with other major carriers in the Persian Gulf, like Emirates, Qatar and Etihad. Its CEO, Tony Douglas, formerly helmed Etihad.

The airline last year announced firm orders for 39 Boeing 787-9 Dreamliners, with options for 33 more.

Riyadh hopes to commence flights by 2025, and has plans to connect to 100 global destinations by 2030.

Delta isn't Riyadh's first partnership. In recent months, the new carrier has also inked strategic agreements with Singapore Airlines and Turkish Airlines, among others.

Delta gains new Gulf partner

Delta CEO Ed Bastian cited the new choices, benefits and destinations for customers in announcing the partnership with the Saudi startup airline.

"Most importantly, Riyadh Air shares Delta's commitment to providing an elevated customer experience, which is why we're looking forward to building and expanding this partnership in the months and years ahead," Bastian said in a statement.

It's also worth noting that Delta's enhanced tie-up with the Saudi startup comes after it spent much of the last decade sparring with the largest Gulf carriers over access to the U.S. and alleged subsidies from their rivals' respective governments.

The feud eventually quieted down, but in the wake of the fallout, American Airlines ultimately dropped its own objections to instead double down on its partnership with Qatar via the Oneworld Alliance and United forged its own pact with Emirates — a rival it also once criticized.

Delta has maintained ties with Saudia through the SkyTeam alliance, but its newest arrangement with Riyadh Air could give it a regional partner that has hopes to someday compete with the connectivity offered by the more established Gulf carriers.

The Delta-Riyadh deal also includes an exclusivity agreement that specifies Delta will become Riyadh's exclusive North American partner and Riyadh Delta's exclusive partner in the Saudi capital city "and beyond."

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