Air India and Saudia Finalize Strategic Codeshare Pact to Boost Connectivity

Air India and Saudia (Saudi Arabian Airlines) have officially signed a codeshare agreement designed to enhance connectivity between India and the Kingdom of Saudi Arabia. The agreement, signed on January 15, 2026, is set to become effective in February 2026. This partnership aims to streamline travel for passengers by integrating flight schedules and offering seamless transfers across both carriers’ networks.

According to the joint announcement, the collaboration will focus on capturing the growing “point-to-point” traffic between the two nations, serving both the massive Indian diaspora in the Kingdom and the rising number of tourists visiting Saudi Arabia. By aligning their networks, the two national carriers intend to offer a competitive alternative to indirect routes currently dominated by regional hubs.

Operational Details and Route Expansion

The core of the agreement allows passengers to book flights across both airlines on a single itinerary. This integration includes through-check-in for passengers and baggage to their final destination, eliminating the need to re-check luggage during transit.

Expanded Network Access

Under the terms of the codeshare, Air India will place its “AI” code on Saudia flights departing from Jeddah and Riyadh. This provides Air India customers with access to several domestic destinations within Saudi Arabia, including:

• Abha
• Dammam
• Gassim
• Gizan
• Madinah
• Taif

Conversely, Saudia will place its “SV” code on Air India flights operating from Delhi and Mumbai. This opens up connectivity for Saudia passengers to a wide array of Indian cities, such as Ahmedabad, Bengaluru, Chennai, Hyderabad, Jaipur, Kochi, Kolkata, and Lucknow, among others.

Executive Commentary

Both airlines have framed this partnership as a critical step in their respective transformation strategies. Campbell Wilson, CEO of Air India, emphasized the importance of the Saudi market.

“Saudi Arabia is one of our most important markets… facilitating easier travel for the diaspora and supporting the Kingdom’s tourism goals.”

— Campbell Wilson, CEO of Air India

similarly, Saudia Director General Ibrahim Al-Omar described the deal as a strategic move to foster stronger bilateral ties, leveraging recent visa reforms that have made travel more accessible for Indian citizens.

Strategic Context: Vision 2030 and Diaspora Demand

The agreement aligns closely with Saudi Arabia’s Vision 2030, which targets attracting 150 million tourists annually by the end of the decade. India represents a top source market for this initiative. By opening access to secondary Saudi cities like AlUla (via Medina) and Abha, the carriers hope to distribute tourism traffic beyond the traditional hubs of Riyadh and Jeddah.

Furthermore, the partnership directly addresses the needs of the “Visiting Friends and Relatives” (VFR) segment. With over 2.6 million Indians residing in Saudi Arabia, the largest expatriate community in the Kingdom, there is substantial demand for reliable connectivity to Tier-2 and Tier-3 Indian cities.

AirPro News analysis

Countering the Super-Connectors

We view this agreement as a necessary consolidation of strength between the two national carriers to reclaim market share from Gulf “super-connectors” like Emirates, Qatar Airways, and Etihad. Historically, a significant portion of traffic between India and Saudi Arabia has flowed through hubs in Dubai and Doha. By coordinating schedules and offering direct “point-to-point” options, Air India and Saudia are positioning themselves to capture higher-yield traffic that prefers non-stop convenience over transit hubs.

Navigating Competitive Pressures

The deal also serves as a defensive measure against aggressive low-cost expansion. IndiGo has recently intensified its operations, launching daily flights from major Indian hubs to Jeddah. As a price leader, IndiGo dominates the cost-conscious labor traffic segment. By partnering, Air India and Saudia can better compete for premium and business travelers while utilizing their bilateral capacity entitlements, capped at approximately 50,000 seats per week since 2019, more efficiently without immediate fleet expansion.

Sources

• Air India & Saudia Press Release
• CAPA – Centre for Aviation
• OAG Schedules Analyser

This article summarizes reporting by Mexico News Daily and MND Staff.

Aeroméxico CEO Proposes Massive Terminal 3 Project for Mexico City International Airport

In a bold move to address chronic congestion at Mexico City International Airport (AICM), Aeroméxico has publicly proposed the construction of a new Terminal 3 (T3). According to reporting by Mexico News Daily, the airline’s Chief Executive Officer, Andrés Conesa, outlined a plan that would see the new terminal eventually replace the existing Terminal 1 and Terminal 2 facilities entirely.

The proposal, which Conesa detailed during an interview on the “RodCast” podcast, envisions a structural overhaul of the capital’s primary air hub. Rather than serving as a mere annex, the proposed T3 would consolidate operations into a single, modern facility capable of handling significantly higher passenger volumes. This development comes as the airport continues to operate under saturation decrees that have limited flight frequencies since 2022.

The Terminal 3 Proposal Details

According to the details shared in the interview and summarized by Mexico News Daily, the new terminal would be constructed on the eastern side of the airport, where Terminal 2 currently stands. Conesa explained that this location is strategically necessary because the western side (Terminal 1) houses critical fuel farms and pipeline infrastructure that are prohibitively difficult to relocate.

Capacity and Logistics

The project aims to increase AICM’s capacity from its current saturation point of approximately 50 million passengers per year to between 70 and 75 million annually. To achieve this, the plan requires a complex logistical reorganization:

• Relocation of Facilities: Existing maintenance workshops and hangars, including Aeroméxico’s own facilities, would need to be moved to the western side of the airport to clear space for the new terminal.
• Consolidation: The new T3 would be larger than T1 and T2 combined, effectively unifying the airport’s passenger operations under one roof.

Conesa emphasized that this expansion is intended to work in tandem with the Felipe Ángeles International Airport (AIFA) and Toluca International Airport. Together, this metropolitan system could handle over 100 million passengers annually, positioning Mexico City as a competitive global hub.

Strategic Context and Government Response

This proposal arrives at a critical time for Mexican aviation. The previous administration prioritized the development of AIFA to solve saturation issues, shelving earlier discussions regarding a third terminal at AICM. However, Aeroméxico argues that AICM remains the preferred hub for connectivity and requires immediate modernization to maintain efficiency.

Current Renovations vs. Structural Change

While Aeroméxico pushes for a structural overhaul, the federal government has initiated a different set of improvements. As noted in reports surrounding the proposal, the government recently announced an investment of approximately 8 billion pesos for renovations at AICM. These works are primarily focused on aesthetic and functional upgrades, such as bathroom improvements and painting, in preparation for the 2026 FIFA World Cup, rather than the capacity expansion Aeroméxico suggests.

“Building T3 on the T1 side is not viable due to the presence of critical fuel farms…”

, Andrés Conesa (via RodCast/Mexico News Daily)

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AirPro News Analysis

The Reality of a Dual-Hub System

Aeroméxico’s proposal signals a shift in the industry’s narrative regarding Mexico City’s airspace. For years, the political debate framed AIFA as the replacement for AICM’s saturation woes. However, Conesa’s comments suggest that the industry views a dual-hub system as the only viable long-term reality. By proposing a massive investment in AICM, the airline is effectively stating that AIFA alone cannot absorb the projected growth of the metropolitan area.

Political and Financial Hurdles

The feasibility of this project relies heavily on political will. With the Sheinbaum administration currently focused on “aesthetic” renovations for the World Cup, a multi-billion dollar capital project that disrupts current operations (moving hangars and demolishing terminals) faces a steep uphill battle. Furthermore, the funding model, whether public, private, or a partnership, remains undefined. Without explicit government backing, T3 remains a conceptual vision rather than an active project.

Frequently Asked Questions

What is the main goal of the Terminal 3 proposal?
The goal is to replace the aging Terminals 1 and 2 with a single, larger Terminal 3 to increase capacity to 75 million passengers annually and streamline operations.

Where would the new terminal be built?
It is proposed for the eastern side of the airport, currently occupied by Terminal 2.

Does the government support this plan?
As of January 2026, the government has not officially adopted this specific proposal. Current government efforts are focused on an 8 billion peso renovation of existing facilities for the 2026 World Cup.

Will this replace the Felipe Ángeles Airport (AIFA)?
No. The proposal envisions AICM and AIFA working together as a metropolitan system with a combined capacity of over 100 million passengers.

Sources: Mexico News Daily

This article summarizes reporting by Dakota News Now.

South Dakota Governor Pre-Files SB 76 to Fund Major Airport Expansions

South Dakota Governor Larry Rhoden has officially pre-filed Senate Bill 76 (SB 76), legislation aimed at injecting capital into the state’s two largest commercial aviation hubs. According to reporting by Dakota News Now, the bill proposes utilizing state funds to issue zero-interest loans for critical infrastructure projects at Sioux Falls Regional Airport (FSD) and Rapid City Regional Airport (RAP).

The announcement, made on January 9, 2026, marks a strategic pivot in how the state approaches infrastructure financing. Rather than offering direct grants, the Rhoden administration is seeking to leverage the Revolving Economic Development and Initiative (REDI) Fund to support airport modernization. This move comes in response to record-breaking passenger growth and the urgent need for expanded terminal capacity in both East and West River regions.

Governor Rhoden, who assumed office following the resignation of former Governor Kristi Noem, has framed the legislation as a fiscally responsible method to support economic development. By utilizing a loan structure, the administration argues that the funds will eventually return to the state for future use, addressing concerns raised by fiscal conservatives during previous legislative sessions.

Legislative Framework and Funding Mechanics

Senate Bill 76 outlines a specific mechanism to transfer unobligated capital from the Housing Infrastructure Fund to the REDI Fund. According to the legislative text summarized in recent reports, the total allocation is capped at $30 million.

Loan Structure and Distribution

The bill designates an equal split of the available resources between the state’s two primary airports. Under the proposed terms:

• Sioux Falls Regional Airport is eligible for up to $15 million.
• Rapid City Regional Airport is eligible for up to $15 million.

Crucially, these funds are structured as 0% interest loans rather than grants. This distinction is intended to make the bill more palatable to lawmakers who previously opposed direct spending on specific airport projects. As noted in the research surrounding the bill, the repayments will flow back into the REDI Fund, allowing the capital to be “recycled” for other economic development initiatives across South Dakota.

Scope of Infrastructure Projects

Both airports have reported double-digit percentage increases in passenger traffic since 2019, pushing current facilities to their operational limits. The funding from SB 76 is intended to accelerate multi-million dollar expansion plans that are already in development.

Sioux Falls Regional Airport (FSD)

Officials at Sioux Falls Regional Airport, also known as Joe Foss Field, have outlined a comprehensive master plan to address congestion. The proposed expansion includes the construction of a new concourse connection and significant terminal upgrades. Key elements of the project include:

• The addition of 5 new aircraft gates, bringing the total gate count to approximately 12.
• 57,000 square feet of new space dedicated to passenger seating and circulation.
• Enhanced baggage claim and security checkpoint facilities.

According to project estimates, the total cost for the FSD expansion is projected between $130 million and $140 million, with a target completion date around 2027. The airport is a major economic engine for the region, generating an estimated $400 million in annual economic activity.

Rapid City Regional Airport (RAP)

Rapid City Regional Airport is facing similar pressures driven by high tourism demand for the Black Hills and Mount Rushmore. Passenger traffic at RAP has surged by approximately 30% since 2019. The proposed funding would support a multi-year terminal expansion and renovation, including:

• Modernization of the TSA security checkpoint.
• Expansion of ticketing and baggage claim areas.
• Upgrades to mechanical systems and infrastructure, portions of which date back to 1985.

Political Context and Stakeholder Reactions

The introduction of SB 76 occurs as Governor Rhoden prepares for the 2026 election. The administration has positioned the bill as a “win-win,” balancing the need for infrastructure growth with fiscal prudence. In a statement regarding the initiative, Governor Rhoden emphasized the necessity of the project:

“South Dakota continues to grow, and we need infrastructure that can grow with us. We’re putting existing dollars to work in a smart, responsible way.”

, Governor Larry Rhoden (via official press remarks)

However, the bill may face debate in the upcoming legislative session. Critics, including some conservative lawmakers, have previously argued that surplus funds should be prioritized for property tax relief rather than targeted loans. Additionally, there is occasional friction regarding the concentration of state resources in Sioux Falls and Rapid City, though proponents argue that these airports serve as the primary gateways for the entire state.

AirPro News Analysis

The shift from grants to zero-interest loans represents a significant tactical adjustment by the Rhoden administration. By utilizing the REDI Fund, the state is effectively treating airport infrastructure as a renewable economic investment rather than a sunk cost. This approach may serve as a model for other states looking to fund aviation infrastructure without permanently depleting general funds, particularly in an era where federal funding can be unpredictable. If successful, this model could accelerate the timeline for regional airports to modernize, ensuring they can accommodate the next generation of commercial aircraft and passenger volumes.

Sources

Sources: Dakota News Now