Move to open up aviation sector in Saudi Arabia for foreign investments  

JEDDAH — There is a move to open up investment in the aviation sector in Saudi Arabia to foreign companies. The General Authority of Civil Aviation (GACA) will coordinate with the Supreme Economic Council's (SEC) secretariat to lift the ban on foreign investment in civil aviation and remove it from the negative list.


Opening up of the Kingdom's civil aviation sector will contribute SR25 billion annually to the national economy by 2020, and create more than 50,000 jobs, according to Abdullah Rehaimy, President of GACA.

The Arabic daily Al-Madinah quoted him as saying that 15 investors have voiced their desire to invest in the sector.

Referring to licensing of private airlines, Rehaimy 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," the daily quoted him as saying in its recent issue.

He said that GACA had not yet licensed any private airline to operate domestic flights in the Kingdom. In April this year, Crown Prince Sultan, Deputy Premier and Minister of Defence and Civil Aviation, announced the government's plan to license two private airline companies to operate domestic flights and cargo services along side state-owned Saudi Arabian Airlines.

"The GACA will soon invite those who want to invest in this sector to present their applications," he said, and added 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.

He hoped that the emergence of private airlines on the aviation scene 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 explained.

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 at 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.

He said that 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.