THE privatisation of Saudi Arabian Airlines, which carried 16 million passengers last year, is on track and will be conducted in a phased way without negative effects on its operations and services.
The airline's catering, cargo and maintenance operation will be the first parts to be divested to commercial investors.
The airline recently purchased 15 new Brazilian-made Embraer aircraft at an estimated SR2 billion ($533 million), the first time it has done so from its own reserves. The airline will use these on both, Gulf and domestic Saudi routes.
The airline’s earnings rose 14 per cent in 2005 from SR1.3bn ($360m) to SR 1.53bn ($410m). Profits also rose by a similar margin to $133 million. The airline, which with a fleet of 150 aircraft is the largest in the Middle East, has been boosted by increases in international passengers and cargo operations but in particular by a significant growth in Hajj and Umrah pilgrim traffic.
Saudia hopes to carry 17 million passengers in 2006.
Last July, National Air Services became the first private airline licensed to operate in competition to Saudia’s domestic services. The Jeddah-based charter operator commenced operations with an exclusive business-class scheduled service, known as Al-Khayala, between Jeddah and Riyadh using an Airbus A319.
NAS says the next move is to launch low-cost flights between a Saudi cities starting in 2006. Also working on a low-fares airline is Prince Bandar bin Khalid Al-Faisal chairman of Investment Enterprises, who has teamed up with British-based Mango Aviation.