JEDDAH: Assistant Minister of Defense and Aviation Prince Fahd bin Abdullah has suggested that foreign airlines may be allowed to operate domestic flights in the Kingdom.
The minister, who is also vice chairman of the General Authority for Civil Aviation, told a Jeddah forum that in order to allow foreign airlines to enter the Saudi market, certain conditions would need to be met. “We currently have 27 airports and we need to have a solid foundation with further economic rules and security standards,” Al-Riyadh newspaper quoted Prince Fahd as saying.
Prince Fahd also said the Kingdom currently has no rules to regulate ticket prices and has left them to the discretion of individual airlines. He added that ticket prices to his knowledge have not changed.
The Shoura Council has commissioned a study on allowing Gulf airlines to operate within the Kingdom.
“There is great demand for domestic operated flights, especially as demographics are strong and Saudi Arabia cannot meet rising demand,” said John Sfakianakis, chief economist at Banque Saudi Fransi. “Opening up the market should help competition and improve services and supply of flights,” he added.
In January, the Association for Consumer Protection urged authorities to open Saudi skies to Gulf airline companies, stating that due to the growth in the Kingdom’s population, more airlines should be allowed to operate domestic routes in Saudi Arabia.
In the past, many Gulf airlines such as Bahrain Air, Emirates, Etihad and Qatar Airways have shown an interest in operating domestically in Saudi Arabia, but have not been allowed to.
Currently, Saudi Arabian Airlines is the main provider of domestic flights in the Kingdom alongside the low cost carrier Nasair.
Nasser Ibrahim Al-Tuwaim, acting chairman of the Consumer Protection Association (CPA), said allowing other airlines to operate in the Kingdom is necessary to break the monopoly Saudia currently has on domestic routes.
Al-Tuwaim added that his call for the Kingdom’s skies to be opened up is part of a three-point plan to combat increasing prices.
Industry sources say that in order to end the monopoly and open Saudi skies to Gulf and foreign airlines, there needs to be a set of regulations for all carriers to level the playing field and avoid any unfair treatment.
In August last year, low-cost carrier SAMA airlines was forced to lay off employees and suspend operations due to high operating costs and low revenues resulting from what they claim was unfair treatment concerning fuel prices.
Sources at both Nasair and SAMA said that because Saudia receives a government fuel subsidy and private airlines do not, they had to pay 10 times more than Saudia. Arab News contacted GACA for a comment on Prince Fahd’s statements, but there was no response.
Source : Arab News, Apr 5, 2011 23:54