DUBAI—Yemen’s Iran-backed Houthi militants are taking aim at Saudi Arabia’s air links to the world, rattling travelers and squeezing another key sector of the kingdom’s economy while its crucial oil industry remains under fire.
The missile attacks on King Khalid International Airport in Riyadh and several southern Saudi cities threaten to choke off business travel and tourism just as the busy conference and travel season gets under way. The overlapping instability stemming from the conflicts involving the Houthis and Iran could also frustrate Crown Prince Mohammed bin Salman’s efforts to renew a push to boost foreign investment.
Saudi Arabia’s travel and tourism sector grew by 7.4% last year, nearly twice the global rate, and contributed $178 billion to the country’s GDP, the World Travel & Tourism Council said in April.
Geopolitical risk firm Dragonfly, which like The Wall Street Journal is owned by Dow Jones, said Thursday’s strike was at least the fifth against a Saudi airport since early this month. The kingdom appears to be struggling to intercept the attacks, which are likely to continue, it said.
Hussein Nasser Eddin, chief executive of global security firm Crownox, said his company has been fielding inquiries from Fortune 500 clients operating in Saudi Arabia, including energy and aviation companies.
The Saudi leadership isn’t planning to cancel the event but is growing more worried about the conflict’s impact on the economy and about tight supplies of missile interceptors needed to fend off attacks, people familiar with the matter said. Flight tracker Flightradar24 said the airport closed again Friday afternoon after disruptions the day before, and cancellations were again piling up. “The latest attacks certainly risk setting back the economic recovery,” said Jason Tuvey, deputy chief emerging markets economist at Capital Economics. Inquiries surged following Thursday’s attacks, he said.
A major test will come with the kingdom’s flagship Future Investment Initiative summit, which is expected to draw thousands of global executives and investors to Riyadh at the end of this month. Thursday’s attacks on Riyadh’s airport—which left three dead, including a pilot for flagship carrier Saudia, and destroyed a passenger jet—are already disrupting air travel. A number of airlines have halted flights to Riyadh, and Singapore Airlines postponed the launch of its flights to the capital until March. “Any firms considering investing in the kingdom will certainly want some clarity over whether these attacks will continue. But renewed hostilities with the Houthis changed the equation. The militant group began shooting at Saudi tankers. Then a drone attack in September forced the shutdown of the pipeline. It has since partially resumed operations, and exports have recovered, but renewed Houthi attacks have now disrupted air travel.
