JEDDAH, 14 April 2003 — Privatization of Saudi Arabian Airlines will bring huge revenues to the company, according to Prince Fahd ibn Abdullah, assistant minister of defense and aviation for civil aviation affairs.
“Studies on the privatization program will be completed shortly to consider partial privatization of the airline,” the prince told Okaz Arabic daily. “It will have a positive effect on the airline’s sales and improve its performance, and these will have a very good impact,” he added.
Saudia is the largest airline in the Middle East with a fleet of 117 aircraft.
Prince Fahd also disclosed that work on the $1.5 billion expansion of King Abdul Aziz International Airport in Jeddah is to start soon. The project will be carried out in several phases without affecting the airport’s normal operation.
Engineering work on the project has already started, the prince said, but did not mention the project’s total cost. The expansion will increase the airport’s capacity from 13 million to 21 million passengers a year.
He said Saudia’s monopoly in the domestic sector would continue until private airline companies are established in the Kingdom. “At present it will be the only airline to provide domestic service. In future, other national airlines could be set up,” he said.
Asked about the prospect of reducing domestic fares, Prince Fahd said Saudia ticket rates were already over-discounted. “Indian Airlines domestic fares are higher than those of Saudi Arabian Airlines,” he said.
Saudia charges SR280 for the one-and-a-half hour flight from Jeddah to Riyadh while Indian Airlines charges SR380 for a flight of the same duration from Bombay to Calicut, already taking into account a special 35 percent discount.
He said the presidency would continue its efforts to increase passenger and airline traffic to and from King Fahd International Airport in Dammam.
“King Fahd airport is closer to Dammam, Qateef and Jubail than Manama airport,” he pointed out.
Prince Fahd hoped that operation of more direct flights would help King Fahd airport attract more passengers in future. “We should have the ability to handle those flights on the basis of a marketing strategy, and this could be possible after privatization and reorganization of the presidency.”
Prince Fahd said efforts were under way to expand airports in the northern cities of Jouf, Arar and Gurayyat. However, he dismissed prospects of establishing new airports at present.
He said studies on transforming the Presidency of Civil Aviation into a general organization were completed. “This transformation will give the organization the necessary flexibility to carry out privatization, ensure private sector participation and expedite infrastructure projects,” he added.
The aviation chief highlighted the significance of the recently opened Prince Salman Airport in Dawadmi, located about 250 km west of Riyadh. “The presence of another airport in the central region is significant for aviation security since it could be used during an emergency,” he explained.
