Prince Fahd bin Abdullah, President, General Authority of Civil Aviation (GACA): Interview

Prince Fahd bin Abdullah, President, General Authority of Civil Aviation (GACA)

Interview: Prince Fahd bin Abdullah

How is GACA meeting the growing need for greater air capacity in the Kingdom’s main urban centres?

PRINCE FAHD BIN ABDULLAH: A key aim of the comprehensive strategic plan to upgrade civil aviation, which was approved in 2013, is to meet growing demand for air travel. Several targets have been set, including providing more carrier licences to work alongside Saudi Arabian Airlines (Saudia) and Flynas. We have also overseen the development, approval and implementation of the Domestic Air Transport Network Restructuring Plan, with the aim of increasing flight numbers and seating capacity. After completing phase one of this plan, the number of domestic flights in 2013 rose by 41.3%.

In addition, we are working to open domestic airports to international flights and to allow more carriers to fly overseas. Nine domestic airports now host international flights, while the total number of international flights reached 15,000 in 2013. This figure is set to rise further and GACA has developed plans for expanding its airport network and air navigation system. This is in order to accommodate the rapid jump in passenger numbers and raise the standard of rendered services. These plans reflect the Kingdom’s expected increased demand for air travel up until 2040.

To what extent will expanding airport facilities at Jeddah and Riyadh improve the Kingdom’s position as a regional and international hub?

PRINCE FAHD: Our two major projects aim to ensure that Jeddah and Riyadh are able to capture a fair share of the region’s air traffic volume. Expansion alone is not sufficient, as both King Abdulaziz International Airport (KAIA) and King Khalid International Airport must first operate on a competitive basis and then provide quality services to be able to attract additional air traffic volume. KAIA will be operated via a private partnership, with ground services also being assigned to the private sector. Significant steps will also be taken to reduce fuel prices at the Kingdom’s airports. Attracting more carriers to Saudi’s airports is progressing through the conclusion of bilateral agreements with different countries and by leveraging the Kingdom’s strategic location, which makes its air space a major passageway for air traffic. This will enable the country to play a larger role within the global transport industry and allow aviation to assume more importance in the economy.

What areas of civil aviation offer the greatest opportunities for privatisation in the near term?

PRINCE FAHD: GACA is proceeding in the implementation of public-private partnerships (PPP) based on models including build, transfer and operate (BTO), and build, operate and transfer. The construction and operation of Prince Mohamed bin Abdulaziz Airport in Medina, for example, is evolving in line with BTO guidelines.

Work is also under way to tender the construction and operation of Taif Airport under a PPP arrangement between GACA and the private sector. This is also the case for KAIA in Jeddah, with GACA planning to assign more airports to the private sector in the future.

The second ground services licence in international airports has also been tendered to the private sector. With regard to Saudia, four of its strategic units have already privatised, namely catering, cargo, ground services and maintenance, and work is under way to privatise Prince Sultan Aviation Academy, Saudia Private Aviation, Saudi Airlines Real Estate Development Company, and Saudi Airlines Medical Services.

How will competition and pricing be affected by planned domestic operations by foreign players?

PRINCE FAHD: Granting new air carrier licences for operating domestic and international services, allowing others to work alongside Saudia and Flynas, will enhance competition between all carriers in the country. It will ensure competitive prices and the availability of many substitute products and services for the passenger. This will contribute to coping with greater demand for domestic air transport, which is currently outstripping the efforts exerted by Saudia and Flynas.

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The Report: Saudi Arabia 2014

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