The General Authority for Civil Aviation (GACA) has made it obligatory for new airlines to be given licenses to operate inside the Kingdom to apply the domestic rates charged by the Saudi Arabian Airlines (Saudia), the country’s national carrier, GACA’s Vice President Faisal Al-Suqair said.
He told local business daily Al-Eqtisadiah yesterday that Saudia’s rates would be applied to economy class while competition would be left open for first and business classes in addition to international flights.
“There are terms and conditions under which other airlines would be licensed to operate domestic flights including a firm commitment not to raise domestic fare,” he said.
Al-Suqair said the airlines would be informed about the critical points, which have a high demand for internal reservations and which are not covered by Saudia at the moment.
“The opportunity is open before these airlines to choose the airports from which they intend to operate according to their operation plans,” he added.
GACA early this month received offers from seven airlines which qualified to use the Kingdom’s airports. The names of the companies or alliances, which will be granted a “national air carrier license,” will be announced in October while the actual operations of these companies will start in the last quarter of 2013.
Specialists in commercial aviation were unanimous in their views that the prices of fuel at Saudi airports might constitute a big hurdle for the international airlines. They called for an equal treatment with Saudia in the fuel rates and said such a move would liberate the air industry and end the difficulties arising from a single carrier undertaking the task of all the domestic flights.
The experts said spending on fuel would constitute about 42 percent of the operational costs for the airlines in the kingdom while the international rate is not more than 29 percent.
Nasser Al-Tayyar, a commercial aviation expert and owner of an airlines company, said all the investors in the sector of air transport avoid fueling their aircraft at the Kingdom’s airports because of the high prices of fuel. “Our company deals with five airports in the Kingdom but fuels its aircraft from other countries before departure,” he said.
Al-Tayyar warned that the seven new airlines to be given licenses for domestic flights would not be able to carry out activities under the current fuel prices.
“The airlines have informed GACA about this and asked to be treated on equal footing with Saudia,” he said.
Al-Suqair acknowledged that the fuel prices being imposed by Aramco on airlines companies were too high and were not in line with international prices. “Even neighboring countries which have less resources than the Kingdom sell fuel to all airlines at a price far lower than that of Aramco,” he said.