Al Arabia locks 10-year airport ad deals across 18 Saudi sites

Arabian Contracting Services Co. (Al Arabia) signed a set of 10-year advertising contracts on June 18 with Cluster2 Airports Co., covering 18 airports across Saudi Arabia, the company said in a statement. The agreements grant Al Arabia the rights to sell and manage advertising space, including digital and static displays, at the airports. Financial terms were not disclosed.

Saudi Arabia has been expanding its airport infrastructure under the Vision 2030 plan. The kingdom targets 330 million annual passengers by 2030, up from about 100 million before the pandemic. That growth creates a larger audience for advertisers at terminals, concourses, and boarding gates. Al Arabia already operates advertising concessions at several other Saudi airports, including King Khalid International in Riyadh and King Abdulaziz International in Jeddah. The new contracts extend its reach to additional regional airports, further diversifying its revenue base.

The 10-year duration provides long-term revenue visibility. Airport advertising tends to generate high-margin recurring income once the infrastructure is in place, because the audience is captive and footfall is predictable once airports reach steady-state traffic.

The deal also reflects the privatization trend in Saudi aviation. Cluster2 Airports Co. is a state-owned entity managing a group of airports. By outsourcing advertising, Cluster2 can focus on operations while Al Arabia brings advertising expertise.

Al Arabia reports second-quarter earnings in early August. The contracts were signed after the end of the second quarter, so revenue from them will be reflected in the third-quarter results. The contracts are set to run through 2034.