New policy seeks to propel Saudi aviation sector to new heights by 2030

The International Air Transport Association also welcomed the aviation authority’s proactive approach to engaging with industry stakeholders to help shape and upgrade new aviation regulations. (Shutterstock)
The International Air Transport Association also welcomed the aviation authority’s proactive approach to engaging with industry stakeholders to help shape and upgrade new aviation regulations. (Shutterstock)
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Updated 19 November 2023
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New policy seeks to propel Saudi aviation sector to new heights by 2030

 New policy seeks to propel Saudi aviation sector to new heights by 2030
  • Raft of new regulatory measures aims to ensure an environment for sustainable growth and investments

RIYADH: Saudi Arabia aims to emerge as a leader in the regional aviation sector within 10 years and to achieve this ambitious goal it has introduced a raft of measures to ensure an environment for sustainable growth and investments.

The latest in a series of those measures is the introduction of a new aviation policy that redefines the role of the General Authority for Civil Aviation allowing it to increase its focus on enhancing the competitiveness of the Saudi aviation sector.

Commenting on the Saudi Aviation Strategy, a GACA spokesperson Ibtisam Al-Shehri told Arab News: “We are committed to achieving our goals under the Saudi Aviation Strategy and ensuring the aviation sector plays its role in the transformation of the Kingdom under Vision 2030.”




The International Air Transport Association also welcomed the aviation authority’s proactive approach to engaging with industry stakeholders to help shape and upgrade new aviation regulations. (Shutterstock)

She said all stakeholders, particularly GACA, were highly motivated to ensure the successful implementation of these reforms and “see Saudi Arabia’s aviation sector lead the region by 2030.”

The International Air Transport Association also welcomed the aviation authority’s proactive approach to engaging with industry stakeholders to help shape and upgrade new aviation regulations.

During the Arab Air Carriers Organization annual general meeting in Riyadh, IATA Director General Willie Walsh said: “(Air) traffic in the Middle East grew by 26.1 percent compared to the previous year. For cargo, data shows that the region is already over 2 percent up on 2019 levels.”

FASTFACT

New aviation policy redefines the role of the General Authority for Civil Aviation allowing it to increase its focus on enhancing the competitiveness of the Saudi aviation sector.

The recently announced aviation strategy seeks to attract $100 billion worth of investments by 2030. In a statement, GACA emphasized that these pivotal reforms are aimed at bolstering competitiveness, enhancing transparency, and bringing to fruition the objectives outlined in the Saudi Aviation Strategy.




Ibtisam Al-Shehri, GACA spokesperson

It emphasized that the policy framework is set to create fresh opportunities for investors and operators by leveling the playing field to stimulate increased competition.

The policy overhaul will encompass regulations governing airports, ground services, air cargo, and air transport services.

Airport rules

According to GACA’s media briefing, the airport regulations will cover matters related to ownership, earnings, quality of service, and investments.

The authority will recategorize airports into three main groups based on their size and capacity: major airports, which handle over 10 million passengers or more than 125,000 tons of freight; mid-sized airports, serving between 3 and 10 million passengers or handling 25,000 to 125,000 tons of freight; and small-scale airports, accommodating less than 3 million passengers or handling under 25,000 tons of freight.

The regulatory environment we are putting in place enables airlines to grow, innovate, and provide the best possible service to passengers.

Ibtisam Al-Shehri, GACA spokesperson

Freight refers to goods being transported in large quantities from one place to another, often by various modes of transportation including airplanes.

Furthermore, GACA’s policy specifies who can own and control airports. As per the new plan, the Saudi government or government-owned entities can own the land and airport facilities, but foreign investors can now also serve as airport operators without any restrictions.

Managing airports

Under the new plan, GACA will assume the role of a regulator that will only step in if and when needed. Decisions will be finalized in this regard following thorough consultation with airport user groups. The contours of the new policies will take shape after a careful review of the input from different stakeholders.

Al-Shehri said: “We have consulted with airlines on our reforms to ensure that the regulatory environment we are putting in place enables airlines to grow, innovate, and provide the best possible service to passengers.”

Ground services and cargo

The new rules regarding ground services, including baggage handling, freight, and mail handling, aim to establish a competitive sector with enhanced productivity and service quality, along with regulations on pricing and quality.




Abdulaziz Al-Duailej, GACA president

GACA also reportedly took measures to curb malpractices and eliminate the risk of any kind of manipulation while deciding which ground and ancillary services should be economically regulated.

Reforms concerning stakeholders and service providers involve defining the roles and responsibilities of each party, reducing government involvement with investors, and streamlining interactions with clear areas of responsibility.

The new policy also introduces standards to ensure global service quality, and commitments to key performance indicators, clarifies the airport’s role, and outlines escalation mechanisms for service providers and users.

GACA President Abdulaziz Al-Duailej emphasized the alignment of these changes with global practices and their potential impact.

He said: “GACA’s transformation of Saudi Arabia’s aviation economic regulations will drive further investment, growth, and performance across the aviation sector.

These changes will create more competition, choice, and value for passengers and consumers.

Abdulaziz Al-Duailej, GACA president

“The regulations will enable the realization of the Saudi Aviation Strategy, which is mobilizing $100 billion in investment from public and private sector sources by 2030. These changes will create more competition, choice, and value for passengers and consumers.”

Air transport

Regulations for air transport have been streamlined to align with global best practices, according to GACA.

The reforms for national carriers include the approval of airline marketing agreements, a process for allocating international traffic rights on constrained routes, and criteria for wet-lease approval and renewal.

Wet leasing, defined by EU regulations, involves operating an aircraft under the lessor’s Air Operator Certificate.

Scheduled foreign carriers will benefit from streamlined local office requirements and the removal of bond requirements, while general-purpose charters will no longer require economic approval for series charters and will see the removal of local office and bond requirements.

General aviation operators will enjoy more flexibility as restrictions on “empty leg” flights are eliminated, improving international flight network connectivity.

An empty-leg flight occurs when a chartered jet, initially flown to a specific location without passengers, returns without any booked passengers to its home base.

Al-Shehri said: “The totality of these measures has the effect of optimizing costs for operators and investors while improving transparency in commercial transactions and providing the flexibility for market participants to innovate.”

She told Arab News: “Over the coming months, we want to highlight the contribution and importance of the sector to the Kingdom, celebrate key milestones in the sector’s progress under the Saudi Aviation Strategy, as well as celebrate the talent and people that are driving this transformation across the sector.”

What is in it for passengers?

The new aviation policy aligns with GACA’s recently approved passenger protection guidelines, set to take effect on Nov. 20.

The new rules will focus on supporting passengers in cases of delayed or canceled flights, reservation issues, or changing the ticket class. Some refunds may reach up to 150-200 percent of the ticket fare.

The guidelines also address the rights of passengers with special needs, along with ensuring compensation of SR6,568 ($1,751) in case of lost luggage and up to SR6,568 in case of damaged luggage.

In this context, Al-Shehri told Arab News: “The enhanced competitive environment will attract new investment and market participants, thereby providing a wider range of choices for passengers and improving the quality of service experienced at airports and airlines.”

“These new economic regulations follow GACA’s enhancement of passenger rights regulations earlier this year, which introduced the most comprehensive protections in the region,” she added.

Earlier this year, Saudi national airlines issued refunds totaling SR58 million to passengers during 2021-22. GACA clarified that these refunds primarily addressed issues such as delays or loss of luggage, flight cancellations, and delays.

Sustainability factor

Recently, Saudi Arabian Oil Co. successfully converted used cooking oil into certified sustainable aviation fuel through one of its joint ventures.

In a statement, Saudi Aramco Total Refining and Petrochemical Co. announced it had used the foodstuff as a renewable feedstock in its low-pressure hydrodesulfurization unit, resulting in the production of certified sustainable aviation fuel.

SAF is a liquid fuel that reduces carbon dioxide emissions by up to 80 percent, according to IATA.

 


Saudi Arabia introduces clean diesel and gasoline fuels in Kingdom’s market

Saudi Arabia introduces clean diesel and gasoline fuels in Kingdom’s market
Updated 27 February 2024
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Saudi Arabia introduces clean diesel and gasoline fuels in Kingdom’s market

Saudi Arabia introduces clean diesel and gasoline fuels in Kingdom’s market

RIYADH: Saudi Arabia’s sustainability drive is gaining momentum with the Ministry of Energy announcing the launch of clean diesel and Euro-5 compliant gasoline in the Kingdom’s market. 

According to a Saudi Press Agency report, these newly introduced fuels offer lower emissions than traditional diesel and gasoline.

Like their predecessors, these energy sources are suitable for all means of transportation, and are also expected to contribute to preserving the environment and achieving the goals of the Kingdom’s Vision 2030, the report added. 

Euro-5 is a standard set by the EU to regulate the emissions of vehicles. 

Saudi Arabia is leading the Middle East and North Africa region in sustainable efforts through various undertakings, including the Saudi Green Initiative. 

The Ministry of Energy said that the introduction of these two fuels comes as part of the Kingdom’s efforts to reduce emissions and reach net zero in 2060 through the application of the circular carbon economy approach. 

The report added that the launch of these resources would encourage car manufacturers to introduce the latest energy-efficient vehicle technologies to the Kingdom. 

In January, multi-project developer Red Sea Global announced that it has become the first company in Saudi Arabia to use low-carbon biofuel in all its delivery trucks.

In a press statement, RSG revealed that the entire fleet of land vehicles is now powered by electricity or biofuel. 

The biofuel is produced from used cooking oil sourced within Saudi Arabia. The type of fuel RSG has adopted emits only 0.17 kilograms of carbon dioxide equivalent per liter, compared with 2.7kg CO2e per liter from regular diesel usage.


Johnson & Johnson MedTech begins direct operations in Saudi Arabia 

Johnson & Johnson MedTech begins direct operations in Saudi Arabia 
Updated 27 February 2024
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Johnson & Johnson MedTech begins direct operations in Saudi Arabia 

Johnson & Johnson MedTech begins direct operations in Saudi Arabia 

RIYADH: Saudi healthcare is poised to benefit from advanced medical interventions after Johnson & Johnson’s technology firm, J&J MedTech KSA, announced the launching of its direct operations in the Kingdom.  

The company provides high-tech medical and surgical equipment and aims to bring customers closer to a more streamlined experience, according to a statement.   

This move not only aligns with the firm’s commitment to enhancing medical interventions and improving clinical outcomes but also reflects the company’s ongoing investment in the future of Saudi healthcare, it added.   

Marzena Kulis, managing director of Johnson & Johnson MedTech for Middle East & Africa, said: “We remain deeply vested in Saudi Arabia and in contributing to the Vision 2030 to support in developing the healthcare sector, driving economic growth, nurturing local talent, and fostering innovation.”    

She added: “As an entity, Johnson & Johnson has been present in Saudi Arabia for nearly 40 years, putting the needs of patients, families, physicians, and nurses first, and functioning as advocates for the health of the Saudi community.”   

The senior executive added that as the company transitions into this new direct model, its esteemed partners will have fewer obstacles in providing the best care for their patients.

Moreover, Trad Al-Khelaiwi general manager of J&J MedTech KSA, highlighted: “As a company that is dedicated to fostering local talent, our direct operations are also aimed at creating more opportunities within the Kingdom and supporting the government’s Saudization efforts.”

He added: “In fact, since the start of the project, we’ve made 76 new hires — with our priority and majority being KSA nationals.” 

Furthermore, Al-Khelaiwi emphasized that this transformative shift would bring the customers closer to Johnson & Johnson’s quality standards and help develop the local healthcare market with international know-how.

“By taking this bold step, we are not only embracing the health goals of Vision 2030 and aligning with the National Health Transformation Program but also spotlighting the immense potential of local talent in driving innovation and progress,” Transformation Director at Johnson & Johnson MedTech Peter Lane underscored. 

In November 2022, Johnson & Johnson announced providing digital solutions that will shorten the time patients spend in hospitals.  

According to Marzena Kulis, managing director of Johnson & Johnson MedTech Middle East, the move was crucial in countries with lower bed capacity.  

“The digital solutions that we currently offer help to shorten the time of patients’ stay, so the capacity can absorb more patients, especially in the geographies where capacity is limited,” Kulis said in an exclusive interview with Arab News at the time.


Demand for fossil fuels not likely to diminish anytime soon: Saudi energy minister

Demand for fossil fuels not likely to diminish anytime soon: Saudi energy minister
Updated 27 February 2024
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Demand for fossil fuels not likely to diminish anytime soon: Saudi energy minister

Demand for fossil fuels not likely to diminish anytime soon: Saudi energy minister

 

RIYADH: Saudi Arabia aspires to become one of the largest producers and exporters of clean energy, said Energy Minister Prince Abdulaziz bin Salman.

In an interview with the quarterly bulletin issued by the Saudi Association for Energy Economics, the minister said the Kingdom is capable of producing green and clean hydrogen at competitive prices.

Prince Abdulaziz said the Kingdom is focussing on all energy sources including solar, wind and green hydrogen as well as nuclear and geothermal.

This will help the Kingdom to reduce the consumption of liquid fuels in generating electricity and reaching the optimal energy mix, he added.

The minister cited the establishment of the largest green hydrogen production plant in NEOM as an example. The plant will have an annual production capacity of 250,000 tonnes by 2026.

Talking about the fluctuations in the oil market, he said the Organization of the Petroleum Exporting Countries has mechanisms in place to deal with global crude market challenges.

Despite highlighting Saudi Arabia’s energy transition plans, Prince Abdulaziz said the need for fossil fuels, especially oil and gas, will continue for decades as also indicated by several industry reports.

The minister added that Saudi Arabia is working to reduce carbon emissions, and that it has a program to replace liquid fuels.

He explained that the program aims to run industrial facilities to rely on natural gas or alternative fuels as well as building renewable energy sources.

Furthermore, Prince Abdulaziz highlighted how Saudi Arabia has quadrupled its current renewable energy capacity from 700 megawatts to 2,800 MW by the end of 2023, with more than 800 MW of renewable energy sources still under implementation and about 1,300 MW in various stages of development. On top of that, the Kingdom plans to produce 200 additional MW this year.

The energy minister also revealed that work is underway to build one of the largest projects to capture, transport, and store carbon dioxide with an annual capacity of up to 9 million tonnes by 2030 and 44 million tons annually by 2035.

He reiterated the Kingdom’s goal to reduce emissions to 278 million tonnes annually by 2030.


Closing Bell: Saudi main index rebounds to close at 12,602

Closing Bell: Saudi main index rebounds to close at 12,602
Updated 27 February 2024
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Closing Bell: Saudi main index rebounds to close at 12,602

Closing Bell: Saudi main index rebounds to close at 12,602

RIYADH: Saudi Arabia’s Tadawul All Share Index bounced back on Tuesday after recording declines on two days.

The benchmark index gained 69.79 points to close at 12,601.55 with an overall trading value of SR7.31 billion ($1.95 billion), with 169 stocks advancing and 52 declining. 

The Kingdom’s parallel market, Nomu, also gained 661.67 points to close at 26,254.28 and the MSCI Tadawul Index also edged up by 0.68 percent to 1,627.71. 

The best-performing stock of the day was Middle East Pharmaceutical Industries Co., also known as Avalon Pharma, which debuted on the main market on Tuesday. The company’s share price soared by 30 percent to SR106.60. 

Other top performers were Saudi Steel Pipe Co. and Batic Investments and Logistics Co., whose share prices surged by 9.93 percent and 9.87 percent, respectively. 

The worst performer of the day was Saudi Arabian Amiantit Co., as its share price slipped by 5.24 percent to SR29.85. 

On the announcements front, Arabian Centers Co., also known as Cenomi Centers, said that its board of directors approved issuing dollar-denominated sukuk under its international sukuk program. 

In a Tadawul statement, Cenomi Centers revealed that the amount and the terms of offerings will be announced later, depending on the market conditions. 

The lifestyle center operator added that the sukuk issuance is subject to the approval of the relevant regulatory authorities. 

Meanwhile, National Medical Care Co. revealed that it witnessed a net profit rise of 42 percent in 2023 to SR240.9 million compared to the previous year. 

The medical service provider said the rise in net profit was driven by higher revenue, gross profit, and interest income, along with lower sales costs and zakat charges. 

National Medical Care Co. added that the net profit for the fourth quarter of 2023 also witnessed a surge of 15 percent to SR63.5 million compared to the same period in 2022. 

Saudi Basic Industries Corp. also revealed its financial results for 2023 on Tuesday. 

The company, also known as SABIC, reported a net loss of SR2.58 billion in 2023, compared to a net profit of SR16.5 billion in 2022. 

In a statement to Tadawul, the company attributed the accumulation of losses to a decline in revenue due to a decrease in average selling prices and sales volumes. 


Aramco signs procurement agreements worth $6bn to enhance local supply chain

Aramco signs procurement agreements worth $6bn to enhance local supply chain
Updated 27 February 2024
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Aramco signs procurement agreements worth $6bn to enhance local supply chain

Aramco signs procurement agreements worth $6bn to enhance local supply chain

RIYADH: Saudi Aramco’s domestic supply chain is poised for further improvement as it signed procurement agreements worth $6 billion with suppliers in the Kingdom. 

According to a press statement, these 40 procurement agreements were inked as a part of the company’s strategic localization program and are expected to strengthen the firm’s supply chain ecosystem and contribute to the development of the energy services sector in Saudi Arabia. 

The deals will also provide suppliers with long-term demand visibility, enabling them to capture future growth and advance localization efforts.

Wail Al-Jaafari, executive vice president of technical services at Saudi Aramco, said: “The 40 new agreements signed today are expected to contribute to the domestic value chain and further enhance the ecosystem that Aramco is helping to build.” 

Moreover, these procurement agreements will also contribute to achieving the objectives of Aramco’s iktva program, an initiative to drive the growth of a vibrant economy in the Kingdom and create new opportunities for Saudi nationals.

These new corporate deals span the supply of a range of products comprising strategic commodities, such as instrumentation and electrical and drilling equipment. 

“These agreements move us toward a more prosperous, diverse and resilient supply chain, which will help ensure business continuity. They also represent a key milestone on our iktva journey and provide our partners an opportunity to benefit from a dynamic and increasingly diversified operating environment,” added Al-Jaafari. 

Additionally, Saudi Aramco signed two memorandum of understanding with its strategic partners to collaborate on localization and supply chain development. 

Earlier in February, speaking at the International Petroleum Technology Conference in Dhahran, Amin Nasser, CEO of Saudi Aramco, said that the company is very active in its localization efforts. 

“We hired more than 5,000 people, mostly Saudis, but also from 60 nationalities,” said Nasser.

He also added that Aramco has the full capability to grow in any sector to create profitable companies.

In January, a report released by strategic consulting firm Brand Finance revealed that Saudi Aramco has retained its position as the most valuable company in the Middle East region, with a value amounting to $41.6 billion.