A new airline will take off in Saudi Arabia as the kingdom takes a major step in liberalisation of its aviation sector.
SaudiGulf Airlines won a licence to operate internal flights in the country. Saudi Arabia’s General Authority of Civil Aviation (GACA) approved the airline’s application for an air operator’s certificate on June 9, which was formally handed over on Wednesday night, Saudi Press Agency reported.
Based in Dammam, SaudiGulf will offer domestic flights to Riyadh and Jeddah as well as a service to Dubai, according to its website.
While the airline did not say when the flights will start, reports said operations are expected to begin in September.
Saudi Arabian Airlines, known as Saudia, and the budget carrier flynas are, currently, the only local carriers serving the 27 million people living in the country.
Analysts hailed the move, saying that Saudi Arabia has significant potential.
“The news is refreshing and encouraging to see the changes that the Saudi government have embarked on,” said Mark Martin, the chief executive of Dubai-based Martin Consulting. “We believe Saudi Arabia’s dependence on oil will lower to the point where we may see winds of a radical liberalisation trends aimed and designed to attract the world into the region.”
Saudi Arabia is one of the largest countries in Asia by land mass and has no rail network, so the potential for increased air transport is immense, Mr Martin said.
Al Maha Airways, a unit of Qatar Airways, has also been waiting for a certificate to operate in Saudi Arabia, having received an initial licence in 2012, when the Saudi regulator began accepting applications for domestic flights.
Qatar Airways was not immediately available for a comment on the latest development.
Competition is likely to heat up, as the parent company of Saudia plans to launch its own budget airline. The low-cost airline, called Flyadeal, will be based in Jeddah and is expected to be launched next year.
“Clearly the focus is on sustainable economic reforms that are progressive, formidable and radical,” said Mr Martin. “This falls in place extremely well with the recent Saudia restructuring [and] the launch of SaudiGulf Airlines, Al Maha Airways and Flyadeal.”
He said that Dammam’s location close to Qatar, the UAE and Bahrain could lead it to emerge as a seventh hub after Doha, Manama, Abu Dhabi, Dubai, Sharjah and Muscat, adding to already intense competition among Gulf carriers.
“Dammam as a destination was neglected and we’re glad that the Saudi government has finally recognised its strategic value,” said Mr Martin.
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