Saudi Arabia’s newest national carrier, Riyadh Air, confirmed it will launch daily flights to Cairo as it accelerates the build-out of its international network.

CEO Tony Douglas said the Egyptian capital was a strategically chosen early destination, describing the route as an important step in positioning Riyadh as a global hub.

The announcement came at a time when Saudi aviation authorities are advancing plans to strengthen the kingdom’s air-transport ecosystem, highlighting new initiatives aimed at boosting passenger traffic and sector investment.

The airline will operate the route using its Boeing 787-9 Dreamliner fleet, with services scheduled to commence shortly after the airline receives its first aircraft in the coming weeks.

Oil tanker shipping costs urged to their highest level in six years as traders scramble for vessels amid rising Middle East exports and mounting geopolitical tensions, with Saudi shipping giant Bahri moving to expand its fleet.

Daily rates for very large crude carriers, known as VLCCs, on the key Mideast route to Asia have more than tripled this year to approach $200,000, while crude prices themselves have climbed to a six-month high, reflecting tight vessel supply and stronger demand for oil shipments.

The spike has been fueled in part by India and other Asian buyers increasing purchases of Middle Eastern crude as they reduce reliance on Russian supplies, prompting Bahri to snap up additional ships to capitalize on the expanded market.

In his State of the Union address on Tuesday night, President Donald Trump warned Iran against further escalation in the region, heightening market concerns about potential disruptions to oil flows.

Additional upward pressure on freight costs has come from stronger Chinese oil demand, which is tightening tanker availability, while Iranian officials have renewed threats to the Strait of Hormuz, raising fears over a key global shipping chokepoint.

Saudi Arabia posted its largest quarterly budget deficit since 2020 as lower oil revenue and spending by the government on NEOM and some of Crown Prince Mohammed bin Salman’s other ambitious projects widened its fiscal gap. 

Signs of the worsening deficit have been evident for months, with the slowing down of NEOM’s $500 billion desert city called The Line and the shelving of the $50 billion Mukaab centerpiece in Riyadh’s New Murabba district.

The fiscal pressure has coincided with a leadership shake-up, with veteran investment minister Khalid Al-Falih replaced by Fahad Al-Saif, a former Public Investment Fund executive.

According to a Finance Ministry report issued on Monday, the kingdom recorded a shortfall of about 31 billion riyals ($8.2 billion) in the fourth quarter, with total revenue slipping while expenditures remained elevated.

The budget report showed oil income from state giant Saudi Aramco fell about 12% year on year to roughly $45 billion.

The government says it retains room to borrow and manage debt levels because of its relatively low debt-to-GDP ratio and continued access to global debt markets. 

Etihad Airways plans to outfit some of its new Airbus A380 planes with three-room suites while bringing back first class sections across its wide-body fleet.

The Abu Dhabi-based carrier will also increase the number of seats in its premium economy cabins while reducing capacity in economy class, traditionally the most densely configured section of the aircraft, CEO Antonoaldo Neves said in an interview with Bloomberg.

Neves said two of its Airbus A380 double-deck aircraft will feature Etihad’s three-room “Residence” suites, which include a double bed, living area and private shower.

Etihad reported its strongest full-year performance ever on Tuesday, posting a profit after tax of $698 million, a 47% increase from 2024.

Egypt plans to build a fourth terminal at Cairo International Airport and has drawn interest from 68 global firms to manage its growing airport in the Red Sea resort city of Hurghada.

Speaking to legislators, Civil Aviation Minister Sameh El-Hefny said the new Terminal 4 will substantially increase Cairo airport’s capacity and transform it into a regional hub.

Regarding Hurghada, El-Hefny said contractors selected will handle the airport’s management and commercial activities, introducing e-gates and paperless travel systems.

EgyptAir, meanwhile, will implement a major expansion, adding 34 new aircraft to its fleet, El-Hefny said.

Saudi Arabia has softened its strict regional headquarters rule just two years after requiring foreign firms to base their Middle East hubs in the kingdom to win government work.

Officials said government agencies may now seek exemptions to award contracts to companies that don’t have Saudi regional headquarters, using its Etimad procurement platform.

The Local Content and Government Procurement Authority is still setting tight conditions, allowing such bids only when a company is the sole qualified bidder or offers a price at least 25% lower than competitors.

Small contracts worth 1 million riyals ($266,000) or less are automatically exempt, and cabinet ministers can adjust the thresholds or halt the exceptions if they deem necessary.

The shift comes as more than 700 multinationals have already moved regional headquarters to Riyadh, well above the government’s earlier target of 500 by 2030.

Saudi startups attracted the most venture capital in the Gulf last year, raising more than double the funding of their Emirati counterparts.

Yet in AI, the UAE leads, accounting for 60% of regional AI funding, while Saudi Arabia captured just 29%, according to research from Magnitt.

The difference reflects the kingdom’s slower adoption, despite investing in foundational infrastructure.

“On a high level, the UAE and KSA have differentiated strategies when it comes to developing their AI ecosystems,” Sam Marchant, founder of Dubai-based VC Forward Pursuit, told Arabian Gulf Business Insights.

The gap, however, may narrow as Saudi Arabia ramps up 2.2 gigawatts of AI compute capacity. Meanwhile, the UAE’s earlier infrastructure build-out and rapid adoption has made it easier for entrepreneurs to ideate, validate and scale AI startups in the country.

Abu Dhabi tech conglomerate G42 will build a massive supercomputer in India in a deal aimed at bringing nation-scale sovereign AI capabilities to Asia’s third-largest economy. 

The project, announced on the sidelines of the AI Impact Summit taking place in New Delhi, will be delivered in collaboration with U.S. AI company Cerebras Systems, the Mohamed bin Zayed University of Artificial Intelligence and India’s Centre for Development of Advanced Computing.

“Sovereign AI infrastructure is becoming essential for national competitiveness,” said G42 India CEO Manu Jain. “This project brings that capability to India at a national scale, enabling local researchers, innovators, and enterprises to become AI-native while maintaining full data sovereignty and security.”

G42 also announced a partnership with U.S.-based governance platform Credo AI to accelerate the adoption of so-called responsible AI across emerging markets. The project will develop risk-monitoring tools, policy design and education programs.

The Summit has seen Indian Prime Minister Narendra Modi holding court with a crowd of global political and tech leaders, including Abu Dhabi Crown Prince Khaled bin Mohamed, French President Emmanuel Macron, Brazilian President Luiz Inacio Lula da Silva, Alphabet CEO Sundar Pichai, OpenAI CEO Sam Altman, Anthropic CEO Dario Amodei and Meta’s Chief AI Officer Alexandr Wang.