* Saudi-backed Riyadh Air completes maiden flight to London

* Carrier entering challenging market hit by Iran war

* Saudi could offer safer entry-exit point to Middle East -

CEO

By Sarah Young

HEATHROW, England, June 10 (Reuters) - Saudi Arabia's new

airline Riyadh Air launched its first London flight on its new

Boeing ( BA ) fleet on Wednesday, with CEO Tony Douglas playing down

the impact of the Iran conflict and saying the startup could

benefit from travellers avoiding other parts of the Gulf.

The state-backed carrier's inaugural service to London

Heathrow, operated by one of its Boeing 787 Dreamliners, comes

as war-related disruption in the Middle East and higher jet fuel

prices weigh on the global aviation sector.

Douglas said Riyadh Air's smaller fleet offered some

insulation from the crisis.

"I'm glad I haven't got a fleet of 200 aircraft now, because

that is a slightly different challenge," said Douglas, when

asked about launching during conflict in the region.

Deliveries are set to bring its fleet to eight by the end of

July, and it plans to fly to 22 cities by March 2027, Douglas

said.

Airlines across the Middle East, including Etihad Airways,

Emirates and Qatar Airways, have been affected by air strikes

causing airport closures and travel disruption since the war

started in late February, while carriers elsewhere are dealing

with consumer worries over rising fares and jet fuel shortages.

Riyadh Air has so far avoided direct disruption. The absence

of airport closures in the Saudi capital has supported demand,

Douglas said, with some travellers viewing Riyadh as a more

stable gateway.

"Perhaps to the point where some people have taken the view

that it's a safe entry-exit point," he said.

Douglas, who ran Etihad from 2018 to 2022, said early ticket

sales were encouraging but declined to provide figures.

Launched in 2023, Riyadh Air is Saudi Arabia's second

national airline after Saudia, and is owned by the country's

Public Investment Fund. With up to 72 787s and as many as 60

A321neos and 50 A350s on order, Douglas calls it "the biggest

global aviation startup in modern history".

The airline is part of the oil producing country's plan to

diversify its economy into new industries such as tourism,

logistics and technology.

"The primary demand is actually the populace of the Kingdom

of Saudi Arabia," Douglas said when asked about ticket sales,

adding that Riyadh Air's bespoke cabins and digital footprint

were designed to appeal to the country's large number of

under-30s.

By 2030, Riyadh Air is aiming to fly to more than 100

destinations, Douglas said. It has announced routes to Cairo,

Dubai, Jeddah, Madrid and Manchester so far, and cities in India

are likely to follow, he added.