Saudi Arabia invites airlines to operate domestic routes

24 January 2012

Currently only Saudia operates domestic flights in the kingdom

Saudi Arabia’s General Authority for Civil Aviation (Gaca) is inviting airlines and investors to submit expressions of interest by 18 March to operate domestic flights in the kingdom.

By granting non-Saudi airlines licences, Gaca is aiming to increase the level of competition in the kingdom’s domestic aviation market in support of a huge investment in aviation infrastructure that is currently under development in the kingdom.

“Before, domestic flights were only operated by Saudi Arabian Airlines [Saudia]. Many Gulf and [other] Arabian airlines requested to operate flights in Saudi Arabia, but Gaca refused. Now, they [Gaca] are opening it up,” says a source at Gaca.

“Any airline, if it reaches the conditions will be given licence to operate here.”

Gaca says that it will issue the tender to bid in April. Analysts say that the move is likely to be detrimental to existing airlines operating domestic flights like Nas Air and Saudia. “State-owned Saudia is not a beacon of success like Emirates, Qatar Airways or Etihad Airways, and opening up Saudi air space to new entrants will mean that the national carrier will struggle more if, as expected, they lose traffic,” says Saj Ahmad, chief analyst at the UK’s StrategicAero Research.

Saudia has long dominated the kingdom’s aviation sector. The airline is currently carrying out a privatisation programme with its catering and cargo units already privatised. Privatisation of the ground services is underway and the aviation academy and maintenance division are expected to be privatised by 2013.

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