Competition spurs Saudi aviation growth

National Air Services is expected to launch services with five single-aisle aircraft, possibly Airbus A320s, to serve domestic destinations and later expanding to serve other destinations in the Middle East. Within four years 18 aircraft could be deployed to provide more than 80 flights a day.

NAS is already established as a private charter operator in Saudi Arabia providing medical evacuation services to oil firms operating in remote desert areas such as the Rub Al-Khali.

The company, with a fleet of 28 aircraft including an Airbus A318 corporate jet, also provides executive jet services to VIP clients and manages the international NetJets fractional ownership and leasing programme in the Kingdom.

EasyJet talks

Mohammed Al Zeer, NAS president says his company has employed top level international aviation consultants and has met with all the most successful low-cost carriers including the UK's EasyJet which has confirmed that it is in talks about franchising its brand to NAS.

Sama Airline has also been established to offer low-cost flights in the Kingdom. The carrier, like NAS, is well resourced and has a paid-up capital of $53.3 million provided by Investment Enterprises which is chaired by Prince Bandar bin Khalid al Faisal.

CEO Andrew Cowen says that Sama will commence routes between Riyadh, Dammam and Jeddah and later expects to offer services to neighbouring Gulf countries when approval is obtained.

However it is the Kingdom's substantial domestic market that is to be addressed first. Some 33 million air passengers passed through Saudi Arabia's 27 local and regional airports as well as the Kingdom's three international airports in 2006 as air travel continues to grow.

The General Authority for Civil Aviation is to spend $8 billion to expand airports at Jeddah, Medina and Tabuk which will see Medina become a fully fledged international airport, the Kingdom's fourth after Jeddah, Riyadh and Dammam.

A further international airport is also expected to be developed at Rabigh, 200 kilometres north of Jeddah, to serve the new King Abdullah Economic City.

Saudia low-cost carrier

Growing competition has spurred Saudi Arabian Airlines to announce plans to launch its own low-cost operation to cater for the needs of lower-income groups.

Director-general Khaled Al-Mulhim believes that by offering competitive prices the carrier can draw an extra 8-10 million passengers within two years. However, where gaps are identified others are preparing to enter the market.

Saudi businessman Fawzi Ali Bundugji is the principal shareholder in Tair Airlines a new Manila-based carrier set up to start services to the Gulf. This follows Philippines Airlines' decision to stop flying to the region nine months ago.

As well as domestic passengers, the new budget airlines are also likely to eventually target the 6 million expatriates in Saudi Arabia who seek affordable travel to and from their countries.