Qatar Airways and Gulf Air have become the first foreign carriers to win licences to operate domestic flights within Saudi Arabia.
A statement by the General Authority of Civil Aviation said that, “the best bids came from Gulf Air and its partners, and Qatar Airways”. A total of 14 foreign and local airlines were competing for the licences. The overall decision was based on the experience of applicants in air transport, operational efficiency and financial solvency.
The Kingdom had stirred great interest among the circles of foreign carriers with its intention of awarding licences for domestic flights. Stretching over 2.149 million square kilometres and inhabited by more than 27 million people, the country offers tremendous opportunity for development of air transport. This huge market is only served by the national carrier Saudi Arabian Airlines and budget airline National Air Services.
Relative to its size, the country’s airline network is one of the poorest in the region. According to General Authority for Civil Aviation (GACA) data, an estimated Saudi Arabia’s 27 airports handled traffic of over 54 million passengers last year. This was an increase of about 13.6 percent compared to 2010. Passengers have often complained about the limited number of air travel routes and poor quality of services.
GACA believes that it may take up to three to six months for other foreign airlines to enter the Kingdom’s domestic aviation market. However, there is no confirmation whether their bids would eventually be successful. Meanwhile, Qatar Airways and Gulf Air are working on final procedures for their newly issued operating licences.
The entry of foreign carriers in the Kingdom signals a new era in its domestic aviation market. This development is part of the country’s efforts to liberalize different sectors of economy and reduce its reliance on oil exports for growth. Earlier, GACA also allowed airlines to revise their fares under certain circumstances and agreed to review fuel prices at Saudi airports to ensure fairer competition.