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Qatar Airways keen to launch airline in Saudi Arabia

Qatar Airways has expressed an interest in operating an airline registered to fly in Saudi Arabia's domestic market.

The carrier has issued a statement saying its CEO Akbar Al Baker has held talks with the chairman of Saudi Arabia’s General Authority of Civil Aviation (GACA), Prince Fahad bin Abdullah Al Saud about opportunities arising from the kingdom’s newly launched aviation liberalisation policy.

Last year Saudi Arabia announced that it would open up its domestic aviation market to foreign carriers and recently said it would issue the first of these licences in September.

Demand for domestic flights in Saudi Arabia has shot up as the kingdom’s population has risen five-fold since 1964 to over 26 million, but the Arab world’s largest economy currently has just two operational airlines-state-owned Saudi Arabian Airlines and low-cost carrier nasair.

GACA has said up to 14 carriers from within and outside the Gulf have expressed an interest in obtaining the licence, but it has not revealed the names of these airlines.

Al Baker said Saudi represented a key growth market for Qatar Airways with an underserved market and need for greater domestic air services.

However, he expressed concern about high fuel charges in Saudi and the government’s policy of controlling domestic air fares. He said these policies led to the demise of Sama Airlines two years ago and continue to weigh heavily on Saudia and nasair.

Still, Al Baker said the airline was keen to invest in the Saudi domestic aviation market, but ‘this was dependent on a fundamental rethink by the government of certain factors which needed to be tackled’.

Qatar Airways’ interest in launching a new Saudi-based airline will only come to fruition if Al Baker can convince the Saudi government to drop its ‘forced policy of fuel charges and fare-fixing’, said aviation analyst Saj Ahmad.

“That’s why there has been rather muted interest in the Saudi government proposals issued last year opening up its airspace to new parties and greater competition,” he told AMEInfo.com. “Given that Saudia and nasair are the only real two big players in the country, any new operation by Qatar Airways would be a welcome move for customers and it may well drive traffic away from the existing Saudi airlines and maybe even force the government to rethink its aviation policy. That’s a long way out, but it’s evident that Qatar Airways’ interest will have caused concern for Saudia, since they have the most to lose here.’