Saudi Arabian Airlines, the national carrier of the world's largest oil producer, carried 13.3 percent more passengers last year as the airline's fleet increased.
Saudia carried 24m passengers in 2012, 2.85m more than the previous year, with more passengers travelling domestically within the kingdom than on the operator's international routes, Arab News reported, citing the airline's director general Khaled Al-Molhem.
The airline added extra capacity after receiving 58 new Airbus SAS aircraft (A320, A321, and A330) and Boeing's wide body 777-300ER during the year, helping increase its number of seats and flight frequencies, the newspaper reported, citing Molhem.
The carrier operated a record 171,341 flights in 2012, or 8 percent more than 158,449 flights in 2011.
The state-owned carrier competes with budget airline nasair, which has been operating since 2007 and is 37 percent owned by Prince Alwaleed bin Talal's Kingdom Holding. In 2010, Sama Airlines, another budget carrier that also operated in Saudi Arabia, suspended operations after amassing over US$300m in losses.
Saudi Arabia, which has the Arab's world's largest economy and seeks to open up its aviation market, announced in December that Qatar Airways and Bahrain's national carrier Gulf Air had secured licenses to operate foreign and local flights within the kingdom.
A key criticism in Saudi Arabia has been that the fuel subsidy for national carrier Saudi Arabian and a cap on domestic fares has disadvantaged competitors. The kingdom, which has a population of about 27m people, operates four international and six domestic airports.