Private sector flies high as aviation market opens up
Saudi Arabia’s aviation sector has begun to hot up with two budget carriers taking to the skies on domestic routes.
Low-fares operators Nas Air and Sama have both made inaugural flights in the last month, appealing to the country’s fast emerging tourism and business markets, and offering travellers an abundance of fantastic deals and flexible options at value-for-money fares.
Nas Air’s inaugural flight in February, on the Riyadh-Jeddah-Riyadh route, was piloted by its CEO, Captain Peter Griffiths, who took the left-hand seat on both legs. Many of the first guests onboard had booked seats for the special SR9 ($2.4) fare, offered through the airline’s website, www.flynas.com. The inaugural flight was of encouraging load factor, clearly indicating market demand and growth potential for the airline industry in the Kingdom, said a statement from the airline.
“We have bookings months in advance from varying market segments. Nas Air is confident and pleased to give equal opportunity to the people of the Kingdom to fly affordably, safely, and comfortably,” said Griffiths.
The airline is set to launch new routes to Medina, Jizan and Gurayat from March 31, April 1 and April 24 respectively. A promotional fare of SR19 is being offered for the first 30,000 bookings.
The airline, which hubs at Riyadh, will initially operate three A320s to short and medium haul domestic destinations, with plans to expand into international markets in the future. It plans to increase its numbers to eight aircraft by the end of 2007, as new routes are launched. Further expansion will be funded by an initial public offering (IPO) as early as 2008.
Also making its debut flight last month was Sama airline, whose operations are based at King Fahd International Airport in Dhahran. The airline has three Boeing 737 aircraft, each with a capacity of 148 passengers and hopes to have a fleet of eight aircraft by the end of 2007 and to 35 aircraft within the next five years. Initially, Sama will operate to five main destinations, Dammam, Riyadh, Jeddah, Madinah and Gizan, on a schedule of 32 flights a week.
'We believe that facilitating travel is a way to facilitate life for citizens and residents of Saudi Arabia,” Prince Bandar bin Khalid Al-Faisal, chairman of the board of directors of Sama said in a speech at the launch, quoted by Arab News.
Prince Bandar also indicated that part of the company's shares will be available in an IPO next year.
He said the transformation of civil aviation in Saudi Arabia into an independent authority is a significant step that enhances air transportation.
To facilitate travelling procedures, Sama announced a new reservation and payment program that enables travellers to book a seat and pay through ATM or bank tellers, in addition to reservation over the internet, Sama sales centres and travel agents around the country.
The airline announced commencement of its services in February, with a launch promotion of 10,000 free seats. “Even at our normal prices, you can fly from Dammam to Riyadh for as little as SR99,” said CEO Andrew Cowen.
In line with the budget model, both airlines keep costs low by eliminating the unnecessary costs and ‘frills’ which characterise traditional legacy airlines. These are then passed on to passengers.
Typically, the cheapest fares are available to passengers who book in advance.
The launches are in line with new aviation regulations that allow new airlines to compete with the national carrier on domestic routes.
In a statement following the first flight by NAS, the president of the General Authority of Civil Aviation (GACA) Abdullah Ruhaimi said a study is being conducted to evaluate the domestic aviation market demand until 2010, said a report in the Gulf News.
“If the authority finds that there is a need for more private companies to enter the aviation market, then a recommendation will be made to the GACA council to approve new licensing requests,” he is quoted to have said.
by Clark Kelly