Evaluation-Etihad to sound out buyers as Gulf carriers race in the direction of IPOs

By Federico Maccioni, Hadeel Al Sayegh and Andres Gonzalez

DUBAI/LONDON (Reuters) – Etihad Airways and flynas are gearing as much as listing on native inventory markets this 12 months, marking the primary IPOs by Gulf carriers in practically 20 years, with Etihad sounding out buyers subsequent week forward of a possible sale of round a 20% stake, two sources mentioned.

Etihad is taking a look at a list this quarter, the folks with information of its plans mentioned, with certainly one of them saying the airline would goal each native and worldwide buyers.

It may increase round $1 billion in what can be the primary airline IPO within the Gulf since Kuwait’s Jazeera Airways in 2008, one of many two folks and a 3rd supply mentioned.

Saudi Arabia’s price range provider flynas, backed by Kingdom (TADAWUL:4280) Holding, the funding firm of billionaire Prince Alwaleed Bin Talal, may additionally listing this 12 months, one other individual accustomed to its plans mentioned.

Qatar Airways, one of many area’s largest carriers, may go public earlier than the last decade is out.

The 4 folks declined to be recognized as a result of the plans are confidential.

Etihad, and its proprietor, Abu Dhabi’s sovereign wealth fund ADQ, declined to remark. Flynas didn’t reply to a request for remark.

Kingdom Holding’s CEO advised Saudi state-owned broadcaster Al Arabiya TV on Wednesday that the corporate was within the ultimate stage of getting approval from the Saudi market regulator to listing in Riyadh.

Flynas is value a minimum of $2 billion, Prince Alwaleed posted on X earlier this month.

Dubai’s Emirates has additionally beforehand been flagged as a possible IPO candidate. Its chairman and chief govt Sheikh Ahmed bin Saeed Al Maktoum advised reporters final 12 months that an IPO was not his resolution to make and that this might be a Dubai authorities resolution and he would go forward if requested to take action.

TOURISM

The potential listings are pushed partly by the native governments’ efforts to diversify their economies away from oil, betting on sectors like tourism as worldwide journey revives after the pandemic.

The IPOs would permit buyers to entry a market with vital progress potential, aviation analyst John Strickland mentioned, citing hub functionality because of a geographic location between Europe and Asia, plus Dubai’s sights as a vacationer vacation spot.

Dubai is already a serious stopover level for long-haul flights after overtaking Heathrow because the world’s busiest airport for worldwide site visitors a decade in the past.

Etihad has been via a multi-year restructuring and administration shake-up after investing billions of {dollars} to compete extra successfully with Gulf friends by shopping for minority stakes in different carriers.

The launch of a multibillion-dollar new terminal at Abu Dhabi’s Zayed Worldwide Airport in 2023 tripled the hub’s annual capability to 45 million passengers and will assist the airline’s progress plans.

Etihad has mentioned it’s working to broaden locations to greater than 125 airports by 2030 from greater than 90 at the moment and enhance its fleet beneath a plan to bolster the position of the UAE capital as a journey hub connecting Asia and Europe.

“Markets are vibrant, valuations (for regional firms) are excessive,” mentioned Mohamed Ali Yasin, founder and CEO of funding consultancy agency the Oracle (NYSE:ORCL) Monetary Consultancy and Investments.

In Saudi Arabia, the place tourism is a serious pillar of the Imaginative and prescient 2030 financial overhaul, the practically 20-year-old flynas is planning to broaden its fleet to greater than 160 plane by 2030 from over 60.

Regardless of native competitors from the likes of low-cost participant flyadeal, flynas has all of the credentials to develop additional, Strickland mentioned, citing the dimensions and potential of the Saudi market backed by a younger, rising inhabitants.

The Center East, which had a 9.4% share of the worldwide air passenger market in 2023 – calculated as income per kilometre – had an 8.7% enhance in demand in November 2024 in comparison with the identical month a 12 months earlier, based on IATA.

Different areas nonetheless accounted for bigger shares of the general market, with Asia Pacific topping the listing with a 31.7% share, based on the information.

BRIGHT SPOT?

The Gulf accounted for the overwhelming majority of the 54 IPOs within the Center East and North Africa in 2024, which raised $12.2 billion, up 12% from a 12 months earlier, based on LSEG knowledge.

The Gulf listings may change into a vibrant spot for buyers in an airline sector that has confronted issues in different areas, together with Europe, the place airways, comparable to Lufthansa, have struggled with aircraft supply delays, engine troubles, labour disruption and surging prices.

“Popping out of COVID, among the Gulf carriers had been amongst the primary ones to essentially begin recovering and get the market going once more,” Strickland mentioned.

Europe “is tied up in regulation, local weather change focus, even adjustments, in fact, within the political panorama.”