The airline, part of a push to turn the kingdom into a logistics hub, would be in addition to state-owned Saudi Arabian Airlines, which has suffered losses for years
But in January of this year, the boycotting countries agreed to restore ties with Qatar following a flurry of diplomatic activity by the administration of former US president Donald Trump.
"Iran is a neighbouring country, and all we aspire for is a good and special relationship with Iran,” Saudi Arabia's Crown Prince Mohammed bin Salman said.
"We welcome the KSA initiative for peace with Iran. Iran is our neighbour and KSA our closest friend," PM tweeted.
Bassem Awadallah, seen as an influential figure familiar with the inner workings of the Saudi leadership, was ensnared in a rift within Jordan's royal family that played out in full public glare.
Yet preparations for NEOM, the $500 billion signature project in Prince Mohammed bin Salman's drive to diversify Saudi Arabia's economy, are well underway.
The scale of the project is vast and the region already has well-established transport and business hubs in Dubai, Abu Dhabi and Qatar.
*A respected veteran journalist and editor, Khashoggi was in self-exile and residing in the United States, writing articles critical of the crown prince when he was assassinated on October 2, 2018.