Saudi Arabia to include low-cost Flyadeal in privatization plan

The privatization of Saudia is expected to be completed by 2020, with an IPO of the main airline and its budget carrier unit the most likely option. (Shutterstock)
Updated 23 September 2017

Saudi Arabia to include low-cost Flyadeal in privatization plan

NEW YORK: Saudi Arabian Airlines, (Saudia) the Kingdom’s flag-carrier, is planning to privatize the main airline and the low-cost carrier Flyadeal in a single transaction, according to company plans seen by Arab News.
Most of the rest of the Saudia aviation business — cargo, maintenance, training, medical and real estate — will be privatized in a series of trade sales and public share offerings.
The whole process is aimed to be completed by 2020, with an initial public offering of a combined entity Saudia and Flyadeal the most likely option.
The Saudi Royal Fleet will not be part of the privatise plan, according to the plans.
It is believed the process of “corporatization” — removal from public ownership and establishment as a limited liability company — has already begun. The plans show a new entity, Saudi Arabian Airlines Corporation (SAAC), which could be corporatised into a holding company this year.
A Saudia spokesperson said: “One significant part of the group’s privatization plan is to incorporate SAAC to become the group’s parent company. There are no explicit decisions for this yet, but the estimated timeline is by 2020.”
The privatization of Saudia will be a significant event in the Kingdom’s National Transformation Program. Although not as valuable in monetary terms as other parts of the national portfolio — like energy and infrastructure assets — offering shares in the national airline will be regarded as a test of the Saudi public’s appetite for privatization sales.
Saudia was identified as one of the “jewels in the crown of the privatization process launched by the National Center for Privatization, the body charged with co-ordinating the Kingdom’s $200bn sell-off by the Council for Economic and Development Affairs.
The inclusion of Flyadeal in the sell-off plan is also significant. The new airline — launched as part of a liberalization of the Saudi aviation industry — has only just been awarded its air operators certificate and taken delivery of its first planes.
Flyadeal’s first route — between Riyadh and Jeddah — started on Saturday.
The spokesperson added: “The group privatization strategy covers all strategic business units excluding the Royal Fleet. The plan is to privatise Saudia and Flyadeal together under the group parent company.
Privatization is already underway in some Saudia subsidiaries. “Non-core” entities like catering and ground services are already publicly traded, while others such as real estate and the Prince Sultan Aviation Academy are “under transformation, preparing for privatization,” according to the plans.
Advisers are believed to have been engaged, but Saudia declined to identify them. “The privatization for each business unit involves the use of various external advisers — legal, financial, and strategic — in collaboration with the respective boards and the owners,” the spokesperson said.
The privatization process is expected to change the management structure and business culture at Saudia in a number of ways, formally breaking up a single corporate entity into multiple companies.
Its corporate structure will move from “divisional management to a client vendor relationship,” and from a “single marketing model to an alliance marketing model.”
There will also be an impact on Saudia’s information technology capability.
The main Saudia airline — founded in 1945 — has a fleet of 141 aircraft and recently launched its 87th destination with a route to Mauritius. Earlier this year it was named the “most improved airline” at the Skytrax world airline awards.
A new top executive team of director general Saleh bin Nasser Al-Jasser and CEO Jaan Albrecht has been in place since last year.


Ski resorts out in the cold as France eases lockdown

Updated 27 November 2020

Ski resorts out in the cold as France eases lockdown

  • Frustrated resort operators count the cost of holiday season restrictions

MEGEVE, France:  Megeve, in the foothills of Mont Blanc, was gearing up to welcome back skiers before Christmas after a COVID-19 lockdown was eased.

But France’s government — while allowing cinemas, museums and theaters to reopen from Dec. 15 — says its ski slopes must stay off limits until 2021, leaving those who make their living in the Alpine village frustrated and, in some cases, perplexed.

“When you’re outside, when you’re doing sport outdoors, that’s not the moment when you’re going to give COVID-19 to someone. COVID-19 is passed on in enclosed places,” said Pierre de Monvallier, director of ski school Oxygene, which operates in several resorts including Megeve.

Announcing a phased easing of the lockdown on Tuesday, French President Emmanuel Macron said it was “impossible to envisage” re-opening ski slopes for Christmas and New Year, and that he preferred instead to do so during January.

“It felt like the door had been slammed in our face,” said Catherine Jullien-Breches, the mayor of Megeve, whose green slopes are generally covered with snow by mid-December.

“Unfortunately it’s a real drama for the economies of the villages and the winter sports resorts.”

People who live within 20 km of France’s Alpine resorts will able to visit from this weekend, but with the lifts staying shut, the main draw is missing.

“It’s like going on holiday on the Cote d’Azur and being told the sea is off limits,” said David Le Scouarnec, co-owner of Megeve’s Cafe 2 la Poste.

The problem for the resorts — and the hotels, restaurants, and workers who depend on them for their livelihood — is that their season is short, and they will have little time after the New Year to claw back lost revenue.

Other European authorities are wrestling with the same problem. Italy’s resorts regions are seeking approval for restricted skiing, but Austria, whose biggest cluster of the first wave of the pandemic was at the ski resort of Ischgl — where thousands were infected — is skeptical.

Prevarication cuts little ice, however, with Mathieu Dechavanne, Chairman and CEO of Compagnie du Mont-Blanc, which operates cable cars at Megeve and other resorts.

He said who could not understand why the government allowed trains and metros to operate, but barred him from re-opening. “It’s like we’re being punished. We don’t deserve this. We’re ready.”