The national carrier is preparing to sell minority stakes in its ground handling and maintenance units, in an effort to speed up a process bogged down by bureaucracy.
A source close to the privatisation scheme tells MEED that it will be “a few months” before tenders are issued for either business. But rather than staggering the sales as has happened in the past, Riyadh will carry out both at the same time.
The privatisation process of Saudia was originally launched in 2000, but no major progress had been made by 2006 when it was relaunched following the appointment of the airline’s new secretary general, Khalid Almolhem.
A statement by the airline in December 2006 said that all parts of the business would be partly privatised by the first quarter of 2008. But since then it has only managed to sell off one unit each year.
The hardest part of the privatisation process is selling a stake in the airline itself and is still to come (MEED 9:10:08).
The airline recently completed the sale of a 30 per cent stake in its cargo business for SR2.4bn ($641m). This followed the sale in 2007 of a stake in the airline’s catering business (MEED 21:9:08).
“Every transaction takes time,” says the source. “The company needs to identify the assets in each division and decide how they should be separated. Then the same happens with the people in each business.