JEDDAH, 26 February 2005 — A prominent Saudi businessman and travel expert has called on authorities to speed up measures to allow private airlines to operate domestic flights.
“We have approached the Civil Aviation Authority since the Cabinet decision in 2000 allowing establishment of private airline companies. Unfortunately, we haven’t heard anything new on this matter,” said Nasser Al-Tayyar, chairman and CEO of Al-Tayyar Travel Group.
The government has formed a ministerial committee to set the rules and regulations for private airline companies to operate domestic flights. Prince Fahd ibn Abdullah, assistant defense and aviation minister for civil aviation affairs, has emphasized that only those airlines that fulfill certain important conditions would be allowed to operate, adding that such conditions were necessary to ensure safety of passengers.
The Civil Aviation Authority is conducting a market study on the traffic of passengers to different regions. “We’ll study the market situation from all aspects and make estimates for the coming 10 years to work out how to distribute sectors to private companies,” he said.
Prince Fahd said authorities would then contact investors who are interested in operating private airlines. “We’ll also request the public to give their opinion on the issue before taking a final decision,” he added. The new airlines should have strong administration with adequate financial backing.
The Kingdom’s domestic aviation sector is currently monopolized by Saudi Arabian Airlines.
Al-Tayyar said the Kingdom was in need of another airline in order to boost commercial and industrial activities and promote investment projects. “A new airline company will help facilitate transport of individuals as well as agricultural and industrial products,” he pointed out.
Asked whether a new company was required while Saudia was offering the same services, Al-Tayyar said: “We are seeking a means to activate and quicken domestic air transport to avoid wasting time and losing opportunities.”
He called on authorities to open the sector to private investment. “Why don’t we allow investors to enter this field? It’s the ideal solution to problems such as overbooking and growing demand for flights,” he told Asharq Al-Awsat, a sister publication of Arab News.
Al-Tayyar, whose doctoral thesis focused on “Marketing of tourism in Saudi Arabia” said his group was ready to operate a private airline in the country, adding that it had adequate experience to take up such a challenging venture. Al-Tayyar has conducted a feasibility study on the project in association with Turkish, Indian and Singaporean firms.
A number of neighboring Arab countries including Lebanon have taken the lead by opening up the sector to foreign competition. “This will not only generate competition but also increase revenues,” he said.
Profits of Lebanon’s Middle East Airlines rose 600 percent after opening up the sector, he added.
