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Emirates, Gulf Air eye GACA license

By Omar Elmershedi JEDDAH - Emirates and Gulf Air will bid to operate domestic and international flights in the Kingdom, a member of the General Authority of Civil Aviation (GACA), the Kingdom's aviation authority, revealed here, Sunday.

This comes in the wake of reports that the Kingdom would award licenses to non-national airlines to operate flights in this country. Currently Saudi Arabian Airlines , known as Saudia , dominates the local market.

The GACA member told the Saudi Gazette that he received two phone calls a month ago from Gulf Air and Emirates representatives expressing their intention to bid for the first-ever domestic and international operating licenses, which is aimed at opening up the Saudi air transport market to competition.

The source confirmed that more airlines are interested in bidding for the licenses.

The GACA decision to open up the market to competition from non-national carriers, comes after years of back-and-forth maneuvers between Saudia , the Ministry of Finance, the Supreme Economic Council and the Commission of Experts linked to the Council of Ministers.

"I'd say a major reason for GACA's response is motivated by the government's obligations under WTO (World Trade Organization) membership requirements and the recent restructuring of civil aviation, to become independent from the Ministry of Defense. These factors have greatly eased the process," the source said.

Asked if Gulf Cooperation Council (GCC) air transport operators would have an advantage over other competitors, the source said: "They already have. They know the culture, they have huge databases about travel loads to-and-from the Kingdom and have the cultural adaptability. I believe they are in a much more advantageous position than newcomers from abroad."

The source said traffic to some regional hubs will be affected by Saudi Arabia opening up its local airspace. "I believe it would. Look at the great distance the Saudi airspace is from unfriendly skies. I believe GCC air companies know this fact and will clamor to take advantage of it."

Asked if the national flag carrier, Saudia , could bid for a license, the source said: "Not in its current administrative structure."

But, he added, there was a possibility for Saudia to get some part of the market by forming alliances with other airlines.

"Let's give Saudia le chapeau pas. Since its very beginning Saudia was overloaded with non-commercial objectives and I believe they performed magnificently throughout these years. They had revenue-collecting hardships, they operated unannounced schedules and they faced an unprecedented growth in demand."

"I guess Saudia , with its expertise and long experience, is a valuable asset to any new entrant. I guess Saudia could play a significant role as an independent consultant and backup service provider for newcomers."

According to reports, GACA invited companies on Saturday to kickstart their bids for licenses, ending March 18.

GACA announced that it would issue a request for proposal (RFP) in April 2012 and that the RFP would furnish the bidders with more details and specific conditions of what would be needed to get a license.
The aviation authority would also invite the qualified bidders to an open meeting with GACA to outline further licensing requirements and to make presentations.

Bidders will be allowed to conduct field visits to the country's airports.

GACA said the winning operators will be allowed multiple options, including operating from local airports of their choice and free selection of domestic routes. They will also be allowed to operate international flights.

© The Saudi Gazette 2012