Saudi Arabia to open aviation sector to foreign and domestic competition
Saudi Arabia has recently revealed that it will begin to allow foreign airlines conduct domestic flights. Previously, domestic routes were covered by either government-run Saudi Arabian Airlines, or by National Air Services, a private company. However, the two companies have been struggling recently to meet demand, leading the Saudi government to decide to open the market to foreign providers.
The General Authority for Civil Aviation released a statement to advertize that they will permit both local and foreign companies apply for licenses to run domestic flights throughout Saudi Arabia. The announcement was preceded by a decision to separate aviation from the Defense Ministry, to which it had previously been connected. King Abdullah appointed Prince Fahd bin Abdullah bin Mohammad al-Saud as head of an independent firm, General Authority for Civil Aviation. Mohammad al-Saud has previously acted as the Deputy Aviation Minister.
Earlier this year, Saudi Arabia's governing body, the Shura Council, began investigating the possibility of permitting Gulf airlines to begin operating within Saudi Arabia. The two existing airlines serve an estimated 27 million people, though an imposed price ceilings makes earning profits difficult. Saudi Arabian Airlines buys fuel at subsidized prices, allowing it to stay in business. A third carrier, Sama Airlines, went out of business last year. (Source: english.nuqudy.com)