Monday, December 31, 2012

2013 A Year of Transformation In KSA

As 2012 winds down, good news from the region continue, with Etihad passing the ten (10) Millions passengers carried mark.

However, the most exciting news are GACA in Kingdom of Saudi Arabia (KSA) awarding two (2) operating licenses not one (1) to Gulf Air and Qatar Airways.

KSA is the biggest market in the region with a population of 28 millions and 27 airports and boasts the largest domestic market in the region. The operating license will authorize both domestic and international destinations. Recently, GACA also looked at fuel prices and it is expected that airlines will be allowed to raise fares by 10%.

The market is currently dominated by Saudia (government owned) and NAS AIR a low cost carrier. The government wants to privatize Saudia and has been selling parts of some of the airline divisions like Cargo and Catering.

2013 should see the transformation of the aviation market in KSA with the entry of Qatar Airways and Gulf Air, both with extensive networks, very competitive, with immense resources and very experienced. Both Saudia and NAS AIR will face competitive pressures in terms of levels of services, passenger feeds and pricing. Competition will not be only on the domestic routes but will spill over into international markets as the new entrants are awarded international routes from their KSA hubs and they integrate their KSA networks with their own, providing massive passenger feeds in both directions.

A Happy and Prosperous New Year to you and your loved ones,"live long and prosper".

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