Riyadh, March 18 -- Saudi Arabia's Public Investment Fund (PIF) is in early talks to acquire the Kingdom's flagship carrier as it looks to pour billions of dollars into turning the country into a tourism hotspot.

The Public Investment Fund is considering a deal that would see it add the 80-year old Saudia to its growing portfolio of aviation assets as soon as next year, according to people familiar with the matter.

The PIF would be taking over ownership of the airline from the government with a view to improving efficiency and profitability, the people said. The carrier could then be privatised or merged with Riyadh Air, which the wealth fund is currently setting up, they said.

It's unclear how Saudia would be valued by the PIF, which ...