JEDDAH: The General Authority of Civil Aviation (GACA), which is increasingly moving toward private sector partnership, is launching “Airport City” projects in major airports in the Kingdom.
“Such developments are both economically prudent and good for the growth of air traffic to facilitate the development of commercial, industrial, and — in quieter areas — residential- and tourism-related airport cities,” said GACA President Abdullah Rehaimi.
Rehaimi was speaking on Monday at the Kingdom Aviation Financiers Symposium organized by GACA in conjunction with Boeing at the Jeddah Hilton. “The airfields have all been generously endowed with land reserves, which will meet air traffic increases for many decades to come,” he said.
Among speakers at the event were Marty Bentrott, vice president of Boeing’s commercial airplanes; James Billing, managing director of Boeing’s commercial airplanes; Timothy Myeers, vice president of Boeing Capital Corp.’s structured financing; Ali H. Al-Zahrani, GACA’s corporate planning director; Shawgi M.A. Mushtag, EVP Privatization, Saudi Arabian Airlines; Bruce Ashby, CEO of SAMA; and Maria Angelika Hanne, NAS Air’s chief commercial officer.
“This process is under way at the moment and will result in many significant investment opportunities, both in terms of the property to be built, as well as businesses which can establish themselves at the airports. Also, our airports are key to supporting the new economic cities in terms of air transport. Accessibility is vital for these cities, and the size of the Kingdom means that surface transport is not a viable option for business travelers seeking to invest in the cities. We are therefore upgrading or constructing airports which will serve each of the economic cities,” said Rehaimi added.
In terms of liberalization, Rehaimi said, the Kingdom would see a substantial increase in both domestic and international traffic in coming years. Recent steps toward liberalization have meant that, unlike most parts of the world, the Kingdom has experienced significant growth in both domestic and international flights, he added. The introduction of new airlines — SAMA and NAS Air — and the Kingdom’s planned liberalization of the commuter aircraft sector also means that many smaller, more remote communities are seeing a major step-up in air services, he said.
“Our ultimate goal is that anyone, anywhere in Saudi Arabia should be able to travel to any other airport served city in the country, carry out a significant amount of business and be home again the same day. And this would be on scheduled commercial airline service, not a private business jet,” said Rehaimi.
“GACA expects to have a small regulatory function, focusing on both economic and safety regulations, and a group holding function which will manage investments in airports and air navigation services that will be operated as private sector organizations, potentially with equity stakes by Saudi and foreign investors,” he added.
“Our service delivery, especially in the airport sector, is already highly private-sector oriented. The vast majority of commercial activities, including car parking, retailing, food and beverage at our airports is run by private companies under concession to GACA.”
A number of senior executives were present to discuss the opportunities in aviation financing. Saudi Arabian Airlines, SAMA and NAS Air represented the Kingdom’s airlines and gave their current status and future projections. As a result of the new and constructive approaches toward partnership with the private sector that GACA is currently adapting, many other activities and investment opportunities will be identified to be undertaken by the private sectors, Rehaimi said.
In his keynote address, Bentrott said the aviation sector would witness a 6.6 percent average growth in the next 20 years. “In the next 20 years, there will be a demand for 1,700 new aircraft worldwide, 250 of them in the Middle East including 124 in the Kingdom,” he added.
