Saudi Arabia will award licenses to foreign airlines, allowing them to operate both internationally and domestically, later this year.
The foreign carriers will then begin offering services in the Kingdom by April 2013, General Authority of Civil Aviation (GACA) spokesman Khalid Al-Khaibary told Arab News yesterday.
"We expect the request for proposal for companies that have demonstrated fulfillment of the necessary qualifications to be handed over by the end of May and licensing to be awarded in September," Al-Khaibary said.
He added that according to the current schedule, he expected that once the proposal files were submitted at the end of this month, GACA would be able to provide documented feedback on the files to the airlines by the end of August, announcing the awarding of licenses to the companies by the end of September.
Once licenses are awarded, the airlines would be given four to six months to choose a hub, set up their operations and abide by GACA qualifications and technical procedures, which should be completed around the end of February next year, Al-Khaibary said.
"When the airlines are found to have adequately set up operations according to GACA qualifications, we will give them a period of around 16 days to start services to offer both domestic and international flights, so this would be around April next year," Al-Khaibary added.
Among the qualifications that airlines must fulfill in order to be licensed are financial capability, substantial experience in management and various operating departments as well as adequate cargo and other services.
The reason behind Saudi Arabia's decision to open its skies to foreign carriers, mainly from the Gulf Cooperation Council (GCC), is the rising demand for domestic travel within the Kingdom.
"Demand for domestic travel has amounted to an extra 2 million seats annually that the two current carriers -- state-run Saudi Arabian Airlines and private low-cost carrier National Air Services (NAS) -- are struggling to meet," Al-Khaibary said.
Among some of the benefits the foreign carriers will enjoy, according to the spokesman, is the option to choose any Saudi airport to operate from as its hub as well as various types of assistance offered by GACA, which have not yet been determined or finalized.
When asked if GACA would be in charge of regulating ticket prices once the foreign airlines become operational, Al-Khaibary said he expected some regulations to be in place but that the introduction of competition itself into the Saudi aviation market would do a lot in regulating prices and steadying the overall market.
"Ticket prices, however, will be based primarily on how many of the 14 foreign carriers that have applied will actually win licensing and enter the market, which is still unknown," Al-Khaibary said.
© Arab News 2012
