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• 
  Saudi contractor wins $354m Alkhobar mall contract

  29 June 2026

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  Riyadh-based construction company Lynx Contracting has won a SR1.3bn ($354m) contract to build the Al-Khobar Downtown Mall and Boulevard project.

  The contract was awarded by local developer Arabian Centres Company (Cenomi Centres). The contract duration is three years from the construction start date.

  In a stock exchange filing on the Tadawul, Cenomi Centres said the scope includes “design, engineering, construction, supply, installation, testing, commissioning, obtaining all required regulatory approvals and all related works up to the final handover and full operation of the project”.

  The contract is the first major deal signed since the UAE’s Al-Futtaim Group acquired a 49.95% stake in Saudi Arabia’s Cenomi Retail in a deal worth about SR2.5bn ($667m) in July last year.

  Al-Futtaim said it acquired the shares at a price of SR44 ($11.73) each from Cenomi Retail’s existing shareholders. These include Fawaz Abdulaziz Alhokair, Abdul Majeed Abdulaziz Alhokair, Salman Abdulaziz Alhokair, Saudi FAS Holding Company and FAS Real Estate Company.

  Dubai-headquartered Al-Futtaim Group is one of the region’s most established private businesses, with operations spanning the automotive, financial services, real estate, retail and healthcare sectors.

  In the retail sector, the group operates brands including Zara, Massimo Dutti and Bershka in the region.

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  > Be recognised among the best in the industry at the MEED Projects Awards 2026 …

  

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  Yasir Iqbal
• 
  Iran extinguishes fire at Mahshahr petrochemicals complex

  29 June 2026

  Firefighting teams have extinguished a fire at the Mahshahr petrochemicals complex in Iran’s Khuzestan province, according to domestic news reports.

  The fire broke out at a facility operated by Karun Petrochemical Company on 26 June during an operation to remove debris following recent attacks on facilities in the area, the company said.

  Earlier this month, the facility was hit by Israeli strikes, forcing an evacuation.

  Karun Petrochemical Company produces a range of products.

  It has a nameplate capacity to produce 40,000 tonnes a year (t/y) of toluene diisocyanate (TDI) and 40,000 t/y of methylene diphenyl diisocyanate (MDI).

  It also has the capacity to produce 30,000 t/y of aniline and 92,300 t/y of nitric acid (HNO3).

  TDI and MDI are both used primarily as building blocks to create polyurethane products.

  TDI is mostly used to make flexible polyurethane foams, and MDI is usually used to create rigid foams, adhesives, sealants and elastomers.

  Aniline is also used to make urethane polymers and in the dye industry, where it is a precursor to indigo, which is used to dye jeans blue.

  Nitric acid is a highly corrosive mineral acid, and its main industrial use is the production of fertilisers.

  The Mahshahr petrochemicals complex is one of the most important petrochemical complexes in Iran. It was also previously hit by Israel in strikes in April.

  On 4 April, Israeli forces targeted at least eight major petrochemical complexes in the Mahshahr region, along with critical supporting infrastructure, including power plants that supply electricity to the industrial zone.

  Mahshahr accounts for approximately 28% of Iran’s petrochemicals production.

  Iran’s petrochemicals industry is the country’s second-largest source of export revenue after crude oil.

  The country has a nominal production capacity of about 95 million t/y of petrochemicals, although actual output prior to the latest conflict was significantly lower due to persistent shortages of electricity and natural gas.

  Iran has invested tens of billions of dollars in developing its petrochemicals infrastructure, and if facilities are severely damaged, rebuilding would pose a major financial and technical challenge.

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  Wil Crisp
• 
  UCC Saudi wins $400m Diriyah MEP and finishing deal

  29 June 2026

  

   

  UCC Saudi, the local branch of Qatar’s UCC Holding, has won a SR1.5bn ($400m) contract at Diriyah Square in the Diriyah Two area.

  The scope includes package four at Diriyah Square, covering mechanical, electrical and plumbing (MEP) and finishing works.

  The contractors had submitted their best and final offers for the contract in October last year, as MEED reported.

  Diriyah Square lies at the centre of the Diriyah project and will offer hospitality, residential, retail, leisure and entertainment facilities.

  The contract is another significant contract win for UCC Saudi at the Diriyah project in recent weeks. Earlier this month, MEED exclusively reported that Diriyah Company had awarded a SR2.7bn ($727m) contract for the main construction works on the development’s Waldorf Astoria superblock.

  The contract was awarded to the joint venture of Hassan Allam Construction Saudi and UCC Saudi.

  The Waldorf Astoria superblock is a mixed-use development comprising a Waldorf Astoria hotel, Waldorf Astoria-branded residences, commercial and residential facilities, and office space.

  The Waldorf Astoria hotel will feature 200 keys, while the residential component will comprise 47 branded residences.

  The project is located on the Grand Boulevard South and Northern Arterial Road in the Boulevard Northwestern district at Diriyah Gate 2. 

  The Diriyah masterplan envisages the city as a cultural and lifestyle tourism destination. Located northwest of Riyadh’s city centre, it will cover 14 square kilometres and combine 300 years of history, culture and heritage with hospitality facilities.

  

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  Yasir Iqbal
• 
  Dubai signs agreements in China for metro and AI

  29 June 2026

  Dubai’s Roads & Transport Authority has signed agreements with two major Chinese technology firms during an official visit to China, as it moves to embed artificial intelligence (AI) and smart systems across the emirate’s expanding metro network.

  The RTA signed memorandums of understanding with Casco Signal and Huawei Technologies to strengthen cooperation in AI, smart transport systems and rail development.

  Under the agreement with Casco Signal, an R&D centre and innovation laboratory will be established in Dubai, linked to the Dubai Metro Blue Line and future metro projects. The facility will support testing, training and the development of AI-powered signalling, communications and operational systems before they enter service.

  The Huawei partnership will focus on developing smart city applications, unified transport data platforms, AI-powered traffic and incident management systems, smart operations centres and enhanced digital infrastructure.

  Areas of cooperation also include support for the Dubai 20-Minute City vision, real-time incident detection and response, and the development of redundant data centres to ensure business continuity.

  During the visit, the Dubai delegation reviewed Shanghai’s integrated transport management system, including its command-and-control centre, which coordinates roads, metro, buses and airports. Discussions also explored greater participation by Chinese companies in the RTA’s current and future infrastructure projects.

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  Colin Foreman
• 
  Gulf aviation ambitions face uncertain future

  26 June 2026

  

   

  The Iranian drone strike on Kuwait International airport on 3 June was a reminder of the severity of the threat that Gulf aviation has faced. The attack caused significant structural damage to Terminal 1 and wounded several individuals. It was the third drone strike on the hub in recent months.

  Kuwait has not been alone. After the conflict erupted on 28 February, Iranian strikes targeted some of the region’s most important aviation infrastructure. Dubai International airport, Zayed International airport in Abu Dhabi and Hamad International airport in Doha have all been hit. The attacks caused unprecedented disruption: between 28 February and 5 March alone, more than 15,000 flights were cancelled across seven major regional airports, affecting over 1.5 million passengers. 

  Although the Gulf’s national carriers have resumed services, many international airlines have yet to return.

  Aviation is crucial for the region. The sector is one of the most important drivers of economic growth across the GCC. In Dubai, it contributed an estimated AED137bn ($37bn), or 27% of GDP, in 2024 and supported 631,000 jobs. Those figures are expected to rise to AED196bn and 816,000 jobs by 2030. In Saudi Arabia, Vision 2030 targets 330 million annual passengers, connectivity to more than 250 destinations and air freight capacity of 4.5 million tonnes a year. The sector’s economic contribution is targeted to reach $74.6bn by 2030, up from $21.3bn.

  Sector deteriorating

  The financial community has been quick to update its assessment of the sector’s prospects. Fitch Ratings revised its global airport sector outlook from ‘neutral’ to ‘deteriorating’ in early June. The agency said the conflict has increased uncertainty over regional airspace availability, airline operations and travel demand, with implications for route stability and traffic quality.

  Fitch’s assessment is a warning sign for the Gulf. The region’s major airports have built their business models on international connectivity, long-haul flying and transfer traffic – precisely the categories Fitch identifies as most exposed to rerouting risk and weaker visibility on demand. Gulf hub operators also face the prospect of further airspace restrictions affecting routes linking Asia, Europe and Africa.

  The knock-on effects extend beyond airline revenues. Transfer passengers are also the highest-spending travellers in duty-free, retail and food and beverage outlets. Fitch noted that some Asia-Pacific airports have already begun benefiting from the redistribution of transit and long-haul traffic away from disrupted Gulf hubs.

  The global body representing airlines, the International Air Transport Association (Iata), was equally downbeat when it released its latest financial outlook on 8 June. The organisation now expects the global airline industry to achieve a combined net profit of $23bn in 2026 – roughly half the $41bn previously projected and about half the $45bn estimated for 2025. The net profit margin is forecast at 2%, compared with the earlier projection of 3.9% and last year’s 4.2%. Net profit per passenger is expected to be $4.50, down from $9.10 in 2025.

  “War-related disruptions in the Middle East and rising fuel costs have shifted the outlook for airlines to the worse,” said Willie Walsh, Iata’s director general. “At the regional level, all are in the black but with sharply reduced financial performance, with the exception of the Middle East. The Gulf carriers face operational uncertainty following a near complete shutdown of airspace at the outbreak of the war. These carriers are doing an amazing job maintaining connectivity, but major financial impacts are unavoidable.”

  Fuel costs are a key part of the problem. Jet fuel prices are expected to average $152 a barrel for the year – an increase of almost 70% on the $90-a-barrel average recorded in 2025. The crack spread, or the premium for jet fuel over Brent crude oil, is expected to average $57 a barrel, an historic high. Total fuel costs for the global airline industry are forecast to rise by nearly 40% from $252bn in 2025 to $350bn in 2026. This is based on an expected average Brent crude oil price of $95 a barrel for the year, up 37% from $69 in 2025. Overall, industry operating expenses are expected to grow by 13% to $1.117tn, outpacing total revenue growth of 9.4% to $1.165tn.

  Fitch also raised concerns about the availability of jet fuel in Europe, noting potential disruption to Middle Eastern supply chains. While the agency expects European fuel reserves to cover the summer months even if the Strait of Hormuz remains effectively closed, it cautioned that winter operations could prove more challenging if the disruption persists. Higher airfares and fuel surcharges could further weigh on near-term demand – a headwind for Gulf airports that have benefited in recent years from the restoration of long-haul leisure travel following the Covid-19 pandemic.

  The insurance market adds another layer of complexity. Aviation policies typically grant insurers the right to cancel cover during active conflict, and the terms on which cover is being extended in a region that has seen airports repeatedly targeted are likely to be materially more expensive than before.

  Jet fuel prices are expected to average $152 a barrel for the year – an increase of almost 70% on the $90-a-barrel average recorded in 2025

  Carrier optimism

  The Gulf’s airlines are more optimistic about the future. Abu Dhabi’s Etihad Airways said in early June that it is operating at 90% of its pre-war available seat kilometres – the key industry capacity metric – and that by 15 June the airline will surpass 100%. Planes are 84% full, and crucially, fares are back at pre-war levels. Officials at the airline say that demand for transit through Abu Dhabi from Paris to Asia is running so strongly that the airline is laying on two of its A380 aircraft a day on that corridor from July. 

  While the expectation in the industry outside the Gulf had been that carriers such as Etihad and Emirates would need to discount heavily to entice passengers back after the ceasefire, Etihad has said that it does not expect prices to come down.

  The airline will not be entirely unscathed. Etihad had been on course to deliver a 10% operating margin in 2026, up from 8% in 2025, but that target will now be missed. The airline was badly hit in March, April and May and will not be fully back on track until August.

  Dubai’s Emirates Group released its 2025-26 annual results in May, which confirmed the airline’s status as the world’s most profitable carrier for the reporting year. The group posted a record profit before tax of AED24.4bn ($6.6bn), up 7% year-on-year, on revenues of AED150.5bn, also a record. 

  Unprecedented situation

  The context is important: the results cover the financial year to 31 March 2026, meaning only the final month of March was affected by the conflict. For the first 11 months, the group was surpassing its targets every month. March then brought what Emirates’ chairman and chief executive Sheikh Ahmed Bin Saeed Al-Maktoum described as an “unprecedented situation”. Emirates was flying just 58% of its capacity by 31 March.

  Despite the disruption, the results illustrate the depth of the financial cushion the group has built. Emirates also announced a 20-week salary bonus for employees – far exceeding the 13-week payout that had been linked to performance targets. For the year ahead, Sheikh Ahmed said Emirates would continue taking aircraft deliveries and pressing ahead with its retrofit programme, without resorting to “knee-jerk cost control measures”. The group has hedged its fuel exposure through to 2028-29. “Our fundamentals are strong,” he said.

  On 8 June, Riyadh Air – the airline backed by Saudi Arabia’s Public Investment Fund – announced five new destinations: Cairo, Dubai, Jeddah, Madrid and Manchester, coinciding with the arrival of its first three Boeing 787-9 Dreamliner aircraft. The airline also moved up its inaugural London flight from 1 July to 10 June. 

  The airline will play a key role in delivering Saudi Arabia’s ambition to develop Riyadh into a global aviation hub and to position the kingdom as a major connecting point between East and West. The carrier has set a target of connecting Riyadh to more than 100 destinations worldwide by 2030. Pressing ahead with new routes and aircraft deliveries amid regional turbulence sends a signal that Saudi Arabia’s aviation ambitions are not for deferral.

  Future direction

  Looking ahead, there appears to be diverging fortunes for the sector. Globally, analysts say point-to-point leisure airports are typically better positioned than large hubs reliant on transfer traffic and international corridors, and this may also play out across the Middle East. Airports with a large share of local origin-and-destination demand may prove better insulated compared with the major connecting hubs whose business models depend on stable long-haul routings. 

  For the Gulf’s flagship hub carriers, including Emirates, Etihad and Qatar Airways, state ownership and strong backing mean that the question is less about survival and more about how long it will take to restore the full confidence of international airlines and their passengers. 

  Much remains uncertain. A ceasefire is in place and, as Sheikh Ahmed noted in the Emirates annual report, there are hopes for “a clear resolution to the hostilities soon, and a return to market stability”. But the drone attack on Kuwait shows that the threat from Iran to the region’s aviation infrastructure has not been neutralised. The coming months will be crucial in determining the long-term trajectory of Gulf aviation. 

  Dubai and Riyadh reaffirm airport ambitions

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  Colin Foreman