Saudi To Award New Airline Licences

Saudi Arabia will clear new carriers for takeoff in September, the Kingdom’s aviation authority said on Wednesday, granting airline licences for the right to operate both local and international flights.

Khalid al-Khaibary, the spokesman for General Authority for Civil Aviation (GACA), said 14 companies had applied for licenses and the government had yet to decide on how many carriers it would authorize.

“The requests for proposals will be handed toward the end of May with a deadline to receive bids by the end of August. Winners will be awarded licenses in September,” Khaibary told Reuters by telephone.

National carrier Saudi Airlines and budget airline National Air Services (NAS) now serve a domestic market of around 27 million people.

But with a price cap on domestic flights, private airlines have struggled with their profit margins. In 2010, a third carrier, Sama Airlines, was forced to suspend its operations.

Saudi Airlines, which is undergoing a slow privatisation process, receives fuel at subsidized prices unlike private carriers, allowing it to offset the limits of the ticket cost ceiling.