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)
Short Url
Updated 19 November 2023
Follow

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.

 


Closing bell: Saudi main index slips to close at 12,666 

Closing bell: Saudi main index slips to close at 12,666 
Updated 14 April 2024
Follow

Closing bell: Saudi main index slips to close at 12,666 

Closing bell: Saudi main index slips to close at 12,666 

RIYADH: Saudi Arabia’s Tadawul All Share Index slipped on Sunday, losing 38.52 points, or 0.30 percent, to close at 12,666.90. 

The total trading turnover of the benchmark index was SR6.28 billion ($1.67 billion) as 103 of the stocks advanced, while 122 retreated.   

On the other hand, the Kingdom’s parallel market Nomu gained 137.34 points, or 0.52 percent, to close at 26,390.11. This comes as 31 of the stocks advanced while as many as 38 retreated. 

Meanwhile, the MSCI Tadawul Index slipped 16.03 points, or 0.98 percent, to close at 1,615.00.  

The best-performing stock of the day was Etihad Atheeb Telecommunication Co. The company’s share price surged 9.98 percent to SR110.20.  

Other top performers include ACWA Power Co. as well as Saudi Steel Pipe Co. 

The worst performer was Sahara International Petrochemical Co., whose share price dropped by 4.72 percent to SR34.35. 

Other worst performers include the Arab National Bank as well as the Saudi National Bank.  

On the announcements front, Gulf Insurance Group has announced the board of director’s decision to distribute SR78.75 million in cash dividends to shareholders for the fiscal year 2023. 

According to a Tadawul statement, the total number of shares eligible for dividends amounted to 52.5 million, with the dividend per share standing at SR1.5. 

The statement also revealed that the percentage of dividends to the share par value stood at 15 percent. 

Moreover, Scientific & Medical Equipment House Co. has announced the signing of an SR180 million contract with the Ministry of Health to provide cooked nutrition to hospitals in Madinah.  

A bourse filing revealed that the financial impact of the five-year agreement will commence in the third quarter of 2024.  

Additionally, Al Kathiri Holding Co. has announced that one of its subsidiaries, Msandh Al-Emdad Co., has been awarded a project with the Presidency of State Security to establish a building in Riyadh with a total value of SR20 million.  

According to a Tadawul statement, this project includes the supply and implementation of structural, architectural, and mechanical as well as electrical and systems works for the building in accordance with competition drawings and documents.  

Furthermore, the Saudi Ground Services Co. has announced the signing of an SR2 billion contract renewal with flynas for a duration of five years.  

A bourse filing revealed that under this contract, the Saudi Ground Services Co. would provide ground handling assistance, including ramp and passenger services, for domestic and international flights at all airports in the Kingdom. 

Meanwhile, Gulf General Cooperative Insurance Co. has announced the completion of the sale of 3,321 fractional shares.  

According to a Tadawul statement, the sale revenue of the fractional shares stood at SR44,838, with the average selling price per share reaching SR13.50.  

This comes following the decrease of the company’s capital based on the approval of the extraordinary general assembly.


Saudi master developer KEC inks 2 deals worth $78m for Al-Alya project    

Saudi master developer KEC inks 2 deals worth $78m for Al-Alya project     
Updated 14 April 2024
Follow

Saudi master developer KEC inks 2 deals worth $78m for Al-Alya project    

Saudi master developer KEC inks 2 deals worth $78m for Al-Alya project     

RIYADH: Saudi master developer Knowledge Economic City Co. has signed two deals to deliver 396 residential apartments within the first phase of its mixed-use project Al-Alya.

In Tadawul filings, the listed firm announced the deals with Elkhereiji Commerce and Contracting Co., worth SR288.6 million ($77.92 million).

The first agreement entails fully implementing contracting works for additional residential buildings in the first phase of the Al-Alya mixed-use project. This comprises a group of four houses, offering 132 apartments of different sizes valued at SR117.5 million, excluding value-added tax.

The second contract involves the implementation of electromechanical, finishing, gardening, and site coordination works for a group of eight residential buildings valued at SR171.13 million, providing 264 apartments, the company said in a statement to Tadawul.

Based on work progress, both contracts will be paid in installments per monthly payment certificate.

The company commented on the second deal, saying: “Accordingly, the financial impact is represented in the cash outflow for the amount payable to the contractor over a period of 20 months starting from the end of May 2024.” 

The firm said that the financial impact of the first agreement is represented in the cash outflow for the amount payable to the contractor over a period of 24 months.

Al-Alya is one of the main projects in the Knowledge Economic City and represents a project with mixed-use components within a gated complex compound that combines hospitality, housing and offices as well as retail and education services.

It was designed to respond to the urban trend of humanizing cities and the quality-of-life program that relies on green areas and pedestrian walkways to create a style and vibrancy that meets the Kingdom’s Vision 2030.

The project aims to enable local and foreign companies, businessmen, and digital entrepreneurs to work in Madinah.

In October last year, Knowledge Economic City Co. signed an agreement with Gulf International Bank Capital for SR3.5 billion to establish a real estate investment fund.

The initiative is poised to launch the initial phase of the Islamic World District in Madinah and will span over 140,000 sq. meters, transforming the area into a mixed-use development.

The site will include hospitality, residential, retail, entertainment, and cultural zones, providing over 5,000 hotel keys, 743 residential apartments, plus a designated area of 24,000 sq. m. for retail shops.

GIB Capital is a subsidiary of Gulf International Bank, owned by the governments of the Gulf Cooperation Council, in which Saudi Arabia’s Public Investment Fund holds a 97.2 percent stake, according to the bank’s 2022 annual report.

The project aims to enhance the visitor experience in Madinah, a city that holds historical significance as the first capital of Islamic civilization and a destination that draws millions of pilgrims and tourists annually.


Jordan’s new mining strategy is set to create a $2.9bn industry 

Jordan’s new mining strategy is set to create a $2.9bn industry 
Updated 14 April 2024
Follow

Jordan’s new mining strategy is set to create a $2.9bn industry 

Jordan’s new mining strategy is set to create a $2.9bn industry 

RIYADH: Jordan’s mining sector is set to grow substantially, with projections indicating that its contribution to the nation’s gross domestic product will reach 2.1 billion Jordanian dinars ($2.9 billion) by 2033. 

Up from 0.7 billion dinars in 2023, this ambitious target is part of the government’s newly announced initiative to transform Jordan into a mining state by 2033, as outlined in the country’s National Mining Strategy. 

This strategic overhaul aims to elevate the sector’s workforce to 27,500 and boost the value of its exports to 3.5 billion dinars from 1 billion dinars, according to a report issued by the state-owned Jordan News Agency, also known as Petra.   

The strategy emerges from its Economic Modernization Vision and is backed by directives from Jordan’s King Abdullah, emphasizing the need to accelerate investment-stimulating procedures in mineral exploration.  

A cornerstone of this transformation was the formulation of the strategy, spearheaded by the global consultancy firm Wood Mackenzie.  

In 2023, the Jordanian Ministry of Energy and Mineral Resources completed initiatives and projects under the EMV for the mining sector and set priorities within the vision’s executive program.  

The vision’s main pillars revolve around expediting the nation’s full economic potential while improving the quality of life for its citizens and maintaining sustainable measures. 

Moreover, the ministry’s proactive engagement has led to the signing of 11 memorandums of understanding to bolster investment in Jordan’s extractive industries.  

An additional three memorandums of cooperation were signed with various companies to further these goals.  

According to statements made to Petra, the ministry plans to continue advancing these undertakings throughout 2024, pushing these MoUs toward value-added mining operations.  

These initiatives are part of the nation’s ongoing efforts to boost its standing in the mining and minerals industry. 

In a report carried by Petra earlier in January, the ministry said that it aims to position the country on the global mining map by capitalizing on positive mineral exploration results. 

Over the past two years, the country established several partnerships with international companies in mining exploration.  

Moreover, it recently launched an investment platform to showcase national resources and opportunities in the energy sector. 


Egypt to increase funds for health sector by 25% in upcoming budget

Egypt to increase funds for health sector by 25% in upcoming budget
Updated 14 April 2024
Follow

Egypt to increase funds for health sector by 25% in upcoming budget

Egypt to increase funds for health sector by 25% in upcoming budget

RIYADH: Egypt will increase health sector allocations in the next general budget to 495.6 billion pounds ($10.4 billion), according to the country’s finance minister.   

The North African country’s upcoming fiscal year is set to begin in July. 

Mohamed Maait said in a statement that this reflects an annual growth rate of 24.9 percent compared to the funds allocated for the sector in the current fiscal.   

This is in line with the nation’s goal to improve medical services for citizens, which is also an objective of Egypt’s Vision 2030.  

Moreover, the minister added that allocations for the education sector will also be raised to 858.3 billion pounds, with an annual growth rate of 45 percent.   

Scientific research reserves are also on track to increase to more than 139.5 billion pounds in the next budget, reflecting an annual growth rate of 40.1 percent.

Mait noted that the country will continue to provide the necessary funds to expand healthcare initiatives, supply medicines and medical aids to hospitals, and increase support for health insurance programs. 

He emphasized how Egypt was also working on targeting the speed of gradual expansion in extending the umbrella of comprehensive health insurance.

Furthermore, the minister said the last social package implemented in March included allocating 15 billion pounds in additional increases for doctors, nurses, teachers, and university faculty members. 

The breakdown was divided into 8.1 billion pounds to approve an additional increase in the wages of teachers in pre-university education as well as 1.6 billion pounds to approve a raise for faculty members and their assistants at universities, institutes, and research centers. 

There was also 4.5 billion pounds to approve a supplementary rise for members of the medical professions and nursing bodies.

In 2022, Egyptian President Abdel Fattah El-Sisi discussed strengthening cooperation with the World Health Organization to improve the country’s healthcare sector. 


Oman’s top 5 ports handle over 93.2m tonnes of cargo in 2023

Oman’s top 5 ports handle over 93.2m tonnes of cargo in 2023
Updated 14 April 2024
Follow

Oman’s top 5 ports handle over 93.2m tonnes of cargo in 2023

Oman’s top 5 ports handle over 93.2m tonnes of cargo in 2023

RIYADH: Oman’s top five ports saw a 1.5 percent annual increase in cargo handling in 2023, surpassing 93.2 million tonnes, underscoring their growing significance in maritime trade. 

The terminals of Sultan Qaboos, Salalah Sohar and Khasab as well as Shinas, and A’Suwaiq handled approximately 91.8 million tonnes of general, liquid, and bulk cargo in 2022, according to the Oman News Agency.

It also highlighted a significant increase in the number of berthed ships in 2023, reaching approximately 11,005 vessels compared to 10,553 watercraft in 2022, marking a 4.3 percent rise.

Cruise ship passengers at the Sultan Qaboos, Salalah, and Khasab Ports increased considerably. This achievement reflects the government’s collaborative efforts with tourism partners to enhance hospitality traffic to Oman.

The news agency added that the government succeeded in attracting major cruise ship operators to several Omani connection points, including Salalah, Khasab, and Sultan Qaboos Port.

It also reported that in 2023, 229 cruise ships brought 599,000 passengers to Omani terminals, compared to around 87 ocean liners carrying over 205,000 travelers in 2022. This represents an increase of over 190 percent in commuters.

Credit rating

In another report, the news agency noted that economic experts and specialists attribute Oman’s improved credit rating to government efforts to control spending, reduce debt, increase non-oil revenues, and enhance financial performance indicators.

Mohammed Abu Bakr Al-Ghassani, chairman of the board of directors of the Oman Development Bank, emphasized that his country’s enhanced credit rating by various international agencies, notably Standard & Poor’s, rising from “BB” with a positive outlook in March 2023 to “BB+” with a positive outlook in March 2024, underscores the government’s commitment to optimizing spending, increasing state revenues, and persistently reducing public debts, particularly those with high costs.

Al-Ghassani said the progress in credit rating is a crucial indicator of confidence for investors and borrowers in the economy and the banking sector, adding that Oman stands to benefit from potential future loans with lower interest rates, encouraging foreign investors to engage in diverse investments and large capital inflows.

This, he said, aids in accelerating the economic diversification strategy and achieving the goals of Vision 2040.

Trade balance

According to preliminary statistics released by the National Center for Statistics and Information, Oman’s trade balance showed a surplus of 877 million rials (nearly $2,280 billion) by the end of January 2024, compared to a surplus of 686 million rials during the same period in 2023.

The figures also showed that the value of commodity exports by the end of January 2024 reached over 2.3 billion rials, marking a 16.7 percent increase compared to the same period in 2023.

Meanwhile, the value of commodity imports for Oman amounted to 1.43 billion rials by the end of January 2024, reflecting a 10.6 percent increase compared to the same period in the previous year, which stood at 1.28 billion rials.

According to the state’s news agency, the significant increase in export value is primarily attributed to the rise in Oman’s exports of oil and gas, reaching 1.45 billion rials, marking a 9.6 percent increase compared to the end of January 2023, when it amounted to 1.32 billion rials.

It is noteworthy that Oman’s crude oil exports by the end of January 2024 amounted to approximately 1.13 billion rials, marking a 30.5 percent increase compared to the same period of 2023. 

However, the value of refined oil exports decreased to 95 million rials, reflecting a 36.5 percent decline, while the value of the country’s liquefied natural gas exports dropped to 229 million rials — a decrease of 26.1 percent compared to January 2023.

The same statistics also revealed a 38.5 percent increase in the value of non-oil commodity exports by the end of January 2024, reaching 749 million rials, compared to the end of January 2023, when it was at 540 million rials.

Metal products achieved the highest value among non-oil commodity exports, reaching 356 million rials, indicating a notable increase of 115.9 percent. They were followed by ordinary metals and their products at 122 million rials, reflecting a rise of 21.3 percent. Subsequently, chemical industry products, with export values amounting to 86 million rials, saw a decline of 11.2 percent.

Meanwhile, the statistics also showed that Saudi Arabia led non-oil commodity export trade operations, with a value reaching 103 million rials by the end of January 2024, marking an increase of 82 percent from the end of January 2023.

On the other hand, the UAE led the trade in re-exports from Oman, with values reaching 31 million rials by the end of last January. Furthermore, the Emirates also secured the top spot in the list of countries exporting the most to Oman, with a value of 315 million rials, up by 4.2 percent from the end of January 2023.