JEDDAH, 25 September 2007 - Crown Prince Sultan yesterday disclosed plans to license four more private airline companies within the next few years in order to reduce the burden on Saudi Arabian Airlines.
Prince Sultan, who is Saudia's chairman, made this disclosure while addressing a ceremony held for the signing of an agreement to sell 49 percent of Saudia Catering to a consortium of companies.
The crown prince highlighted the services rendered by Saudi Arabian Airlines to growing number of passengers including millions of pilgrims who visit the Kingdom every year for Haj and Umrah.
He defended the decision to carry out Saudia's privatization in a gradual manner saying it was essential to avoid financial losses. "One day the whole company will be privatized," the Saudi Press Agency quoted the prince as telling the gathering.
Sultan signed the agreement on Sunday night to sell 49 percent of Saudia Catering to Strategic Catering Co. (SCC), a consortium comprising Abdul Mohsen Al-Hokair Tourism and Development Co., Fowzan Holding and Newrest Group Holding. SCC offered the top bid of SR1.703 billion.
The sale came after the Cabinet gave the national carrier the green light last month to convert its strategic units into separate companies in preparation to privatize the airline, the largest in the Middle East with a fleet of 120 passenger and cargo planes.
Saudia put up its catering division for privatization in August last year and received tremendous response from investors. Saudia Catering recorded SR643 million ($171 million) revenue and SR142 million ($37.8 million) net profit in 2005. Saudia Catering currently supplies 25,000 meals daily to 48 airline companies.
