Monday, April 16, 2012

The Liberalisation of Saudi Aviation

Earlier this year, GACA (Saudi Arabia's aviation regulator) announced its intention to allow foreign carriers, mostly from the GCC, to invest in and operate domestic routes and within the scope of existing bilaterals allow them some international flights. April 2012 is supposed to be the month when all conditions and interested parties will be announced.

So far very little real interest, other than press releases has been expressed by airlines. Emirates, who said that they are interested in investing outside the UAE, are not interested in Saudi Arabia mainly because of the cap on domestic airfares. This makes it very hard to compete. Several airlines including domestic carriers have requested a review of airfares to offset losses and make it more attractive to new entrants.

SAMA's failure and bankruptcy in 2010 was attributed to the cap on airfares.


April 2012 is proving to be still an important milestone. It is reported that GACA recommended to the government to raise the airfares cap, citing that ticket prices in the kingdom are 50% less than those in other Arab Countries. They also felt that the raising of the cap would attract local and foreign investors.

The extent of the increase is still unknown, but it reflects a more realistic view to airline economics in the Kingdom and that subsidies to the national carrier to maintain artificially low ticket prices is unsustainable.

Definitely a step in the right direction.

No comments:

Post a Comment

Labels

1 Goal 2010 2012 2013 9/11 AA Abu Dhabi ADAC Air Arabia Air Canada Air India Airberlin aircraft airlines airports ambitions American Airlines Amman aviation AVOD AWST B707-300C B767 B777 B787 BA Bahrain Bahrain Air BangaloreAviation Boeing branding British Airways Business Aviation Cabin Crew Canada change chapter 11 CO Commercials communication community compliance contingency continuity Continuous Improvement cost effective creativity Culture curricula Customer Service Delta Detroit Metro DFW Doha DTW Dubai Dubai Air Show DWC efficiency emergency Emergency Response Emirates employees environment ET409 Etihad ETS EU FA FAA family Flight Attendants flight(s) Flightglobal flydubai GACA Galaxy Tablet GAMCO GCC globalisation GOL Greece Green Gulf Air Hala Hamburg happy health home Hopenhagen Human Resources IFE India Iran Iraq Iraqi Airways Jaffa Jazeera Airways Jet Airways Jordan Just Culture Kuwait Airways LA LCC leadership low cost maintenance management manpower MEA MEBAA MENA Michigan motivation MRO MROAM Oneworld Palestine passengers passion people Philadelphia planet earth Privatization professional QAIA Qantas Qatar Qatar Airways Quality Quick Service Restaurant Radio Repair Stations Risk road roots ROTANAJET Royal Jordanian Safety Sanctions. Sao Jose Dos campos SAT Saudi Arabia Saudi Arabian Airlines Security Sharjah Airport SimliFlying Simplicity SKYTEAM SMS social media Southern California Southwest Airlines Star Alliance Sudan Airways support target teachers Technology terrorism tolerance Toulouse tourism traffic Training transition travel TSA Turkey Twitter UA UAE UBM US Airways VIA Rail Violin Vision volcanic ash Wataniya Airways
 
Top Blogs
Powered By Invesp