GACA plans to establish a holding company for airports privatization


Published — Monday 4 February 2013

Last update 4 February 2013 1:05 am

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The General Authority for Civil Aviation (GACA) plans to establish a holding company for civil aviation. The move aims to ease efforts to privatize airports in the Kingdom and to encourage them to become more globally competitive.
“The establishment of a holding company and the subsequent appointment of independent companies for each international airport will effectively separate the services provided by the executive arm of the company from the control and policy-making sections. It will also strengthen the strategic goals of reviving the civil aviation sector in the Kingdom,” Prince Fahd said in an interview with the Asharq Al-Awsat daily.
The prince said the GACA is moving toward privatization like many other establishments in the Kingdom.
The strategic plan for the revival of the Kingdom’s civil aviation sector focuses mainly on three areas. These areas include, improving the level of passenger services, encouraging the private sector to invest through strategic companies, and maintaining a high level of safety and security, he said.
The strategic plan also aims to raise the annual SR 30 billion in revenue to higher levels, to support the national economy.
Regarding the high price of aviation fuel at Saudi airports, the prince said the GACA has no role in determining the fuel price, as it is Saudi Aramco’s decision.
He added, however, that there is no discrimination between Saudi and foreign airline companies in the matter of fuel prices, as they all have to pay the same price.
“Fuel prices in Saudi airports are, according to studies, higher than the prices of fuel in neighboring countries’ airports. The GACA hopes prices will decrease come to allow Saudi airports to achieve greater competitiveness in the region,” the prince said.
He also said the Council of Ministers ordered a study regarding the ticket rates of domestic flights on an earlier occasion. When new rates are introduced the present price level should be considered as a base and the new rates should be on the basis of when the ticket was reserved and purchased.
“The GACA’s plan is to keep the economy class rates at the present level for those who buy tickets 10 days in advance and for closer dates to the journey the rate will be higher. The operating cost of a flight will also be considered when fixing ticket prices. “We hope that competition between airline companies will encourage them to improve their services to passengers,” he said.
The prince said the aviation sector is a potent source of employment for Saudis. The two new foreign airline companies, who have recently been issued with licenses, will have to establish their own Saudi companies and follow the Saudi labor and employee regulations. The GACA will monitor the Saudization in those companies, he added.
The prince said the issuing of licenses to two foreign companies to operate domestic flights cannot be considered “opening up the Saudi skies for foreign airlines,” as that would mean allowing other countries’ airline companies to operate unlimited weekly flights without restrictions. On the other hand, the two licenses are issued to foreign airline companies to enable passengers in provincial airports to travel abroad without visiting distant international airports such as Riyadh, Jeddah or Dammam.

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