Aeraltus Quick Take: The strategy behind Air India and Riyadh Air's agreement

Aeraltus Quick Take:

Air India and Riyadh Air sign an MoU on interline and codeshare partnership.

Two carriers that are rebuilding premium travel simultaneously, and competing with the same three incumbents-Emirates, Qatar Airways and Etihad

Riyadh Air is greenfield, PIF-backed, with no legacy cost structure, and bookings now open on Riyadh-Heathrow. Air India holds domestic network depth and westbound long-haul slots built over decades.

The Saudi Airlines signed in Jan 2026 handles the network arbitrage on secondary city connectivity. This agreement is different. Riyadh Air gets brand visibility and network reach inside India without the cost of deploying its own product on secondary cities. Air India’s westbound flyers get a Riyadh stopover option that bypasses Abu Dhabi and Dubai entirely.

With Pakistan and Iran airspace disruption still compressing Air India’s westbound economics, will Riyadh Air also be a partial hedge against overflight dependency? That’s worth watching as the partnership develops and as Riyadh Air scales its network.

With the announcement of flyadeal as well, Saudi Arabia now has three state carriers entering India in 2026 at three different price points.