JEDDAH, 18 September 2006 — Saudi Arabian Airlines offers good investment opportunities to local businessmen as it implements the privatization of its non-core businesses and becomes a holding company, according to its director general, Khalid Al-Molhem.
At a meeting with businessmen yesterday at the Jeddah Chamber of Commerce and Industry, Al-Molhem talked about the challenges facing the airline and the goals and strategies it has drawn up for the coming 10 years. Surprisingly, only a small number of businessmen attended the meeting and no businesswomen at all. An airline official said the poor attendance was probably due to lack of organization at the Jeddah chamber.
After Al-Molhem’s presentation, the issue of the airline employing women was raised. Al-Molhem said it was being studied in order to determine the best way for them to work in accordance with our traditions and religion, “but for many reasons, not as flight attendants.”
The airline’s overall improvement plans include services in electronic reservation, first and business class lounges, service units for passengers in major airports, boarding pass kiosks, sales offices and phone service. “A plan is in place for speeding the privatization process of non-core businesses in order to transfer them into strategic units that will be subsidiaries of the Saudi airline holding company,” said Al-Molhem.
The presentation dealt with the four-stage process followed for privatization. The first stage involves choosing consultants; the second is preparing the studies needed; the third is the restructuring of non-core businesses to become strategic (profit) units to be part of the holding company and the fourth is privatizing the holding company by determining the percentage of shares for flotation and completing procedures for an IPO. The airline is now in the third stage.
The five businesses being privatized are: catering, cargo, ground support, maintenance and training (the Prince Sultan Aviation Academy).
The marketing campaign to attract investors and international strategic partners for catering began in August 2006 and the business will be ready for privatization by November this year. The marketing campaign for cargo will begin in October and it will be ready for privatization in February 2007, followed by ground support to be ready by March 2007 and maintenance and training in May 2007. The airline will be privatized in the first quarter of 2008.
Answering questions about low-cost airlines, Al-Molhem said Saudia had not dismissed the idea of providing low-cost no-frills service on some of its routes.
