JEDDAH, 3 August 2006 — Opening up of the Kingdom’s civil aviation sector will create more than 50,000 jobs and contribute SR25 billion annually to the national economy by 2020, says Abdullah Rehaimy, president of the General Authority of Civil Aviation (GACA). He said 15 investors have voiced their desire to invest in the sector.
He said his organization would coordinate with the Supreme Economic Council’s secretariat to lift the ban on foreign investment in civil aviation and remove it from the negative list.
Referring to licensing of private airlines, the GACA chief said joint stock companies that sell part of their shares to Saudis would be given preference. “But this is not a condition for companies to qualify for license,” Al-Madinah quoted him as saying.
He said the authority has not yet licensed any private airline to operate domestic flights in the Kingdom. In April this year, Crown Prince Sultan announced the government’s plan to license two private airline companies to operate domestic flights and cargo services alongside state-owned Saudi Arabian Airlines.
“The GACA will soon invite those who want to invest in this sector to present their applications,” he said, adding that two companies in Riyadh and Dammam would be picked.
The crown prince said the new private carriers would be allowed to provide services such as transportation of passengers, goods and posts between the Kingdom’s airports.
The crown prince hoped that the arrival of private airlines would help provide additional seats to the growing number of passengers, especially pilgrims intending to perform Haj and Umrah and people visiting tourist resorts in various parts of the Kingdom. A number of aviation companies have expressed their desire to operate domestic flights.
According to Rehaimy, rents charged by Saudi airports were the lowest in the world and would encourage more businessmen to invest in the civil aviation sector. “We don’t ask investors to operate a particular brand of aircraft but it should comply with the standards set by the authority,” he pointed out.
He said the GACA would coordinate with producers and suppliers of jet fuel at airports to supply fuel at reduced prices to local investors in the sector. He expected that Saudi Arabian Airlines would face tough competition from international airlines that offer discounted fares to their passengers.
Rehaimy also disclosed plans to sign contracts with private companies in November to operate duty-free shops in the Kingdom’s international airports. “The authority is currently talking to an international company to support its efforts to call tenders for the contracts,” he said.
Rehaimy said the private sector, which currently provides operation, maintenance and cleaning services at airports, would play a greater role in the next phase.
Saudi Arabia has 27 domestic and three international airports, which have a capacity to handle 33 million passengers annually. King Fahd International Airport in Dammam is the largest.
