‘The new strategy will have a positive and lasting impact’
ABDULLAH Rehaimi is not your typical aviation executive.
Born in Makkah and brought up in Jeddah, he is widely regarded as a soft-spoken charismatic leader. After obtaining his BSc in mechanical engineering from the King Fahad University in Dammam in 1975, Rehaimi worked for two years with Chase Manhattan Bank in New York. Upon his return to Saudi Arabia, he joined the Saudi Industrial Development Fund (SIDF) where he spent 25 years in several leadership positions. Just over a year ago, Rehaimi was appointed by royal decree to take over the Presidency of Civil Aviation (PCA).
“Coming from outside the aviation industry, this appointment represents a very big challenge,” says the PCA president. “However, I have set about introducing a new strategy which I believe will have a positive and lasting impact on the PCA and the entire air transport sector.”
According to Rehaimi, the new civil aviation strategy is threefold. “Firstly, we are gradually liberalising and deregulating the air transport sector starting with the domestic market. Secondly, we are improving our operating model, policies, procedures and processes in order to improve efficiently, enable sector liberalisation and achieve financial sustainability. Thirdly and in parallel, we are upgrading physical infrastructure to continue to cope with growth in passenger and cargo traffic, especially in light of the imminent sector liberalisation.”
On liberalisation, Rehaimi says that a key challenge is to balance the government’s social obligation to provide Kingdom-wide air service with economic benefits from attracting competition in commercially viable business propositions.
Therefore, developing a phased liberalisation process – that ensures air transport access for all citizens while fostering competition in a fair and open environment – is one of his immediate priorities.
“We are carefully analysing all economic aspects of our air transport system to identify appropriate commercial opportunities for private participation, keeping in mind the interests of all stakeholders,” he says.
The process for liberalisation will be executed in line with international best practices in order to ensure that the highest levels of safety and security are always maintained. “We will never jeopardise or compromise our standards of safety and security,” confirms Rehaimi.
Rehaimi’s pragmatic business approach is already helping create a completely new culture within the PCA. “The government has an obligation to provide a service but I want to change the way we look at our work,” says Rehaimi.
With more of a free-market approach to the business, Rehaimi states that one of his key objectives is to leverage existing sources of income, create new revenue streams and exercise diligent control of expenses.
A key level in achieving Rehaimi’s financial objectives is to create sustainable and accountable business units. For example, an international airport must be designed and managed to generate enough income to recover its costs. This would involve improving the retail space without jeopardising passenger flow, developing properties around the airport, improving the overall level of passenger services to attract more travelling passengers and marketing the airport to airlines. Hub airports such as Jeddah International Airport will have to apply similar operational improvements targeted to upgrade the services for transfer and transit passengers.
“Achieving our long-term objectives for financial sustainability and commercial success entails significant investments in human resource capabilities and information technology infrastructure as well as revisiting some of our policies and procedures,” says Rehaimi.
The third element of Rehaimi’s strategy is to ensure that investments in airport and air navigation services infrastructure are synchronised with the liberalisation strategy and the new Civil Aviation business model.
For the King Abdulaziz International Airport in Jeddah, the government has already approved the airport expansion and allocated a budget for its design, construction and management. However, the recent conversion of the PCA into a financially independent and commercially orientated entity requires the inclusion of these objectives in the airport’s conceptual design, says Rehaimi. “We are also developing services to meet the expected growth in traffic and the emerging needs of the airports residential and business communities,” he says. “Overall, our airports will serve the community.”
Rehaimi stresses that the overreaching objective of the new strategy “is to enable economic growth and development in Saudi Arabia”.
Stimulating growth in passenger and cargo traffic will have an immediate domino effect in the economy. It will attract investments and provide new employment opportunities in the air transport sector itself as well as relating sectors such as hotels, ground transportation, catering and others. For example, the recent 25 per cent annual growth in Umrah traffic has benefited everyone in these sectors, from taxi drivers to handling agents.
Another example is the potential integration of freight services between strategically located ports of Saudi Arabia and its airports, which would further stimulate trade and tourism and generate new business opportunities. The new strategy
is also expected to attract foreign investment in new airlines, maintenance operations, training facilities, ground handling and new supplies.
“We are already considering airport retail investment opportunities to attract bids from international duty free operators and from Saudi retailers in strategic partnership with international players,” says Rehaimi.
“Taken together, the implementation of the new strategy is bound to have a multiplier effect on the entire Saudi economy.”