DUBAI: Saudi Arabia is considering transferring ownership of national carrier Saudia to the sovereign wealth fund, the Public Investment Fund, two sources familiar with the matter said.

The transfer would include other assets owned by Saudia, one of the Middle East’s oldest airlines, including its low cost unit, Flyadeal, the sources said.

Bloomberg first reported PIF was in talks to acquire Saudia. PIF and Saudia declined to comment.

PIF already owns Riyadh Air, the kingdom’s newest airline which is set to start operations next year. The government is aiming to transform Saudi Arabia into a major aviation hub, with Riyadh Air based in the capital, Riyadh, and Saudia based in the Red Sea city of Jeddah.

Saudia is expected to remain a separate airline to Riyadh Air once its ownership is transferred to the PIF, said the sources, who requested anonymity to discuss the matter as it has not yet been announced.

Saudia would mostly focus on Muslim pilgrims making the journey to Saudi Arabia’s holy sites. Riyadh Air would focus on non-religious traffic, including international transit passengers, the sources added.

Folding Saudia into PIF would give the sovereign fund direct oversight and control of the airline’s strategy.