Gulf carriers rush to IPOs to woo investors Analysis-Etihad

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By Federico Machioni, Hadel Al Sayegh and Andres Gonzalez

DUBAI/LONDON (Reuters) – Etihad Airways and Flynn are preparing to list on local stock markets this year, marking the first IPOs by Gulf carriers in nearly two decades, and Etihad is wooing investors ahead of a potential sale of one unit next week. 20% share, two sources said.

Etihad is looking at a listing this quarter, according to people familiar with the plan, one of which said the airline is targeting domestic and foreign investors.

In the year It could raise around $1 billion, becoming the first airline in the Gulf since Kuwait’s Jazeera Airlines in 2008, one of the two people and a third source said.

Saudi Arabian budget carrier Flynas, which is backed by Kingdom Holding, the investment company of billionaire Prince Alwaleed bin Talal, could list this year, another person familiar with the plans said.

Qatar Airways, one of the region’s largest airlines, could go public before the decade is out.

The four men declined to be identified because the plans are confidential.

Etihad and its owner, Abu Dhabi sovereign wealth fund ADQ, declined to comment. Flinas did not respond to a request for comment.

Kingdom Holding’s CEO told Saudi state broadcaster Al-Arabia TV on Wednesday that the company is in the final stages of getting approval from the Saudi market regulator to list in Riyadh.

Flynns is worth at least $2 billion, Prince Alwaleed posted on X earlier this month.

Dubai emirates has also been suggested as an IPO candidate in the past. The company’s chairman and chief executive, Sheikh Ahmed bin Saeed Al Maktoum, told reporters last year that the IPO was not his decision and that it was the Dubai government’s decision, and he would go ahead with it if asked to do so.

Tourism

Possible details are partly due to efforts by local governments to expand their economies away from oil and bets on sectors such as tourism as international travel revives after the pandemic.

Aviation analyst John Strickland said the IPOs allow investors to tap into a market with high growth potential due to its geographic location between Europe and Asia and Dubai’s attractions as a tourist destination.

Dubai is a major stopover for long-haul flights, having overtaken Heathrow as the world’s busiest airport a decade ago.

Etihad has gone through several years of restructuring and management shakeup after investing billions of dollars in buying minority stakes from other carriers to compete more effectively with its Gulf peers.

In the year The opening of a multibillion-dollar new terminal at Abu Dhabi Zayed International Airport in 2023 will triple the hub’s annual capacity to 45 million passengers and could help the airline’s growth plans.

Etihad says it is working to expand its flights to more than 90 destinations at more than 125 airports by 2030, as part of plans to strengthen the UAE capital’s role as a travel hub connecting Asia and Europe.

“Markets are active, valuations (for regional companies) are high,” said Mohammad Ali Yasin, founder and CEO of Oracle Financial Advisors and Investments, an investment advisory firm.

With tourism as the main pillar of its 2030 economic reforms, Saudi Arabia plans to expand its nearly 20-year-old fleet to more than 60,000 aircraft by 2030.

Despite local competition from low-cost players such as Flydale, Flynns has every indication to grow further, Strickland said, with the size and potential of the Saudi market supported by a young and growing population.

In the year The Middle East, which had a 9.4% share of the global airline market in 2023 – calculated as revenue kilometers – saw an 8.7% increase in demand in November 2024 compared to the same month a year earlier, IATA said.

While other regions still hold a large share of the overall market, Asia Pacific leads the way with a 31.7% share, the data said.

Bright spot?

In the year According to LSEG data, 54 IPOs in the Middle East and North Africa raised $12.2 billion in 2024, up 12 percent from a year earlier.

The Gulf listing could be a bright spot for investors in the struggling airline sector in other regions, including Europe, as airlines such as Lufthansa struggle with delays, engine problems, staff cuts and high costs.

“Coming out of Covid, some of the Gulf carriers were among the first to start to recover and let the market start again,” Strickland said.

Europe is “bound in control, the focus of climate change, even changes, in the political situation.”

(Reporting by Andres Gonzalez in London by Federico Macchioni and Hadel Al Sayegh in Dubai; Additional reporting by Aidan Gregory in London. Editing by Anusha Sakowi and Jane Merriman)