Saudi Arabia hands out licenses for industrial aerospace projects

Recently Saudi Arabia has been making headlines thanks to the bold plans it has devised for its aviation sector. Within the framework of the kingdom’s Vision 2030, up to $100 billion is expected to be invested in new airports, airlines and other travel-related infrastructure. 

But these efforts are by no means confined to the tourism sector.  

This widely encompassing top-down strategy to modernize and diversify the Saudi economy devotes particular attention to the development of a domestic aerospace industry and its related supply chain. A government-backed initiative called National Industrial Strategy (NIS) is acting as a conduit for a number of projects in this field. 

This is the context in which the Saudi aviation authorities announced, on February 24-25, 2025, the granting of assorted licenses for the establishment of aerospace industrial activities in the kingdom, during the Aerospace Connect Forum in Jeddah. 

The first of these licenses has gone to Saudia Technic, the maintenance, repair and overhaul (MRO) arm of the eponymous airline, which is developing a massive one million-square-meter ‘MRO Village’ located next to King Abdulaziz International Airport, in Jeddah (JED).  

This flagship project is backed by the Public Investment Fund (PIF), Saudia Arabia’s deep-pocketed sovereign wealth fund. While it was officially inaugurated in 2023, it is still far from reaching its full potential. 

It is not hard to understand why the MRO segment of the industry is taking such a prominent place in this industrial development strategy. 

In the first place, there is the fact that the aviation services industry is facing capacity constraints globally. To this one can add Saudi Arabia’s own needs, which are expected to grow in the coming years as the country’s commercial aircraft fleet expands. 

According to the ch-aviation aircraft database, as of March 2025 there were 278 active airliners in Saudi Arabia, with another 350 on order from Airbus and Boeing. What’s more, the latter figure is likely to go up if rumors of an imminent additional aircraft order by Riyadh Air, Saudi Arabia’s new international carrier, are finally confirmed. 

“We need more capacity in the system,” said Steven Greenway, CEO of another fast-growing Saudi airline, low-cost carrier flyadeal, speaking at the Aerospace Connect Forum. 

Even if Saudi carriers are expected to generate a significant amount of work for Saudi MRO providers in years to come, projects like Jeddah’s MRO Village have been designed with the international market in sight. The ultimate goal is to turn Saudi Arabia into a global MRO hub, capable of servicing aircraft from across the world. 

This ambition extends to other parts of the aerospace value chain, including the manufacturing of a broad range of parts, components and even complex systems, including full aircraft assembly.  

This is the case of several players in the advanced air mobility industry, which have plans to establish production facilities in Saudi Arabia by the hand of local partners and investors.   

Florida-based advanced air mobility startup Doroni, for example, announced on February 20, 2025, that it has secured a $30 million investment from Saudi firm Kingdom Aero Industries (KAI) to build its eVTOL aircraft in the Saudi Arabia. 

“We see this as the beginning of a strong partnership between the U.S. and Saudi Arabia to bring the H1-X eVTOL to market and shape the future of personal air mobility,” Doron Merdinger, Doroni’s co-founder and CEO, told AeroTime. 

Another case in point is AutoGyro, a producer of gyroplanes, a type of aircraft that generates lift through an unpowered auto-rotating rotor. This Germany-based firm has also found a local partner in Life Shield, a Saudi aerospace and defense company. 

Airbus Helicopters did receive one of the industrial licenses as well.

Miquel Ros / AeroTimeAs eye-catching as the aforementioned projects may be, a lot of action is also taking place further upstream in the industrial ecosystem, with companies like AIC Steel, AMIC and Toho Titanium Metal, for example, working on the production of titanium for aerospace uses.  

A number of local firms are also active in the production of components, like NAMI, which uses 3D printing to produce lightweight aerospace parts.  

Official support for the expansion of many such activities means that many of these projects can benefit from a comprehensive support package, which includes an advantageous customs regime, opportunities for state-backed financial support and privileged access to land in strategic locations. 

As expected, several government-backed organizations are heavily involved in many of the industrial deals in the aerospace sector. These include the General Authority of Civil Aviation (GACA); the General Authority for Military Industries (GAMI); the National Industrial Development Center (NIDC), which acts as the country’s industrial promotion agency; Modon, a public firm which develops land for industrial and commercial uses; and Cluster2, the firm that manages most of the country’s airports. 

Saudi Arabian Military Industries (SAMI), the kingdom’s national defense champion, is of course another active participant in this drive industrial policy drive. The state-owned defense firm has been tasked with leading an increase in the domestic share of defense expenditures to 50% in 2030, from the current single digits. In defense, as in the commercial sphere, international partnerships, such as the one signed in 2023 between SAMI and Turkish drone maker Baykar, are expected to play a key role. 

With no apparent shortage of land or capital, one of the bottlenecks that may hamper the materialization of this vision is the shortage of technically skilled manpower. This is, however, another area to which the Saudi authorities plan to dedicate significant resources.  

In fact, the buildup of a local qualified workforce in the aerospace industry is not so much a means to an end, but one of the ultimate long-term goals of these policies, as Saudi Arabia aims to diversify away from the energy business that has been its bread and butter for nearly a century. The post Saudi Arabia hands out licenses for industrial aerospace projects appeared first on AeroTime.

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