There are indications that Saudi Arabia’s General Authority of Civil Aviation (Gaca) could be preparing to award airline operator certificates (AOCs) to privately-owned airlines before the end of June or in early July.

“We are hoping the AOC will be released before the end of Ramadan,” a source familiar with the project tells MEED.

The most concrete indication that an award could be imminent is the planned holding of an event by the aviation regulator for the new airlines between 20 and 25 June.

Two budget airlines, Al-Maha Airways, backed by Qatar Airways, and SaudiGulf Air, owned by the local Al-Qahtani Group, are waiting to receive their AOC from Gaca three years since they won a licence to operate domestic and international flights.

The release of an AOC is the final hurdle before the airlines can commence commercial operations in Saudi Arabia.

A third domestic airline, Nesma Airlines, is also understood to be waiting final clearance to start operating in the kingdom’s northern region.

In April, state-backed carrier Saudi Airlines (Saudia) announced plans to establish a low-cost airline, to be named Flyadeal, which it says should begin operations by mid-2017.

Saudi Arabia’s first budget airline, Flynas, achieved its first year of profitability in 2015, following a loss-making eight-year period since it was founded. As a result, the carrier has put forward plans to procure some 100 aircraft to replace and expand its 26-strong fleet.

Airport passenger traffic in Saudi airports rose by 10 per cent in 2015.

Gaca has also put forward a broad and ambitious initiative to privatise all of the kingdom’s airports by 2020.