Sulaiman Al Hamdan interview: Tough competitor


  • Share via facebook
  • Tweet this
  • Bookmark and Share
Nas Holding CEO Sulaiman Al Hamdan has to cope with high fuel prices and a fare cap on domestic travel

Nas Holding CEO Sulaiman Al Hamdan has to cope with high fuel prices and a fare cap on domestic travel

The airline industry is cut-throat. Running an airline in Saudi Arabia, a country that is overhauling its vast infrastructure and with a culture that’s still not entirely in tune with no-frills budget travel, is even more challenging. But Sulaiman Al Hamdan, who runs National Air Services, the holding company to which Nas Air belongs, is unfazed. He’s actively been trying to trim the fat off the budget carrier that's been operating in Saudi Arabia for five years and has tried to make the airline’s operations more efficient in the wake of high oil prices, regional political upheaval and an uneven domestic playing field when it comes to the government subsidies its main competitor gets.

“When the licence was granted neither the civil aviation authority or the company seriously considered the situation,” Hamdan says. “Accepting preconditions to fly to very specific domestic airports as a precondition to getting the licence before you are allowed to fly international was a mistake.”

Saudi Arabia plans to open up its aviation market with the issuing of a third operating licence by the end of this year, for which fourteen companies have applied, to operate both local and international flights. Qatar Airways, Bahrain Air and Gulf Air are among the carriers bidding for the licence. It remains to be seen if a new player in the market will change the dynamics of the aviation industry in the kingdom. A main criticism in Saudi Arabia has been that the fuel subsidy for national carrier Saudi Arabian Airlines and a cap on domestic fares has disadvantaged competitors.

Sama Airlines, another budget carrier that also operated in Saudi Arabia, suspended operations in 2010 after amassing over $300m in losses. Nas Air, which is 37 percent owned by Prince Alwaleed Bin Talal’s Kingdom Holding Co, started operating in 2007 and has not made a profit to date, suffering losses due to higher oil prices and political instability that swept across the Arab world, causing it to withdraw from several countries.

Nas Air currently flies to six destinations within Saudi Arabia and nineteen foreign routes. As part of its restructuring and also as a response to changes in its operational environment when protests swept across the Arab world, it has realigned its business. It withdrew from Syria and Yemen because of political instability. And it also left India to maximise the utilisation of its fleet which will now fly within a three-and-a-half-hour radius from its base in Saudi Arabia. Potential routes include Ethiopia, Iran, and Iraq, which all tie in with that new strategy.

The carrier has also introduced what it terms as a fuel-efficiency programme, which has saved it, in the past ten months of this year, nearly $16m, or about 8 percent of its total fuel consumption. Somewhat astonishingly, jet fuel prices in Saudi Arabia are about 18-20 percent higher than the cost in neighbouring countries which has prompted Nas Air pilots to refuel outside their base.

“Sudan is cheaper than us,” Hamdan says.  “When the pilot sees that he has a 50 percent load of passengers he takes more fuel because it’s cheaper.”

These changes are slowly helping the airline decrease its losses and are putting it on target to becoming profitable for the first time since the carrier’s inception next year, Hamdan says.

Article continued on next page

Related:
Companies
Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

  • No comments yet, be the first!

Enter the words above: Enter the numbers you hear:

All comments are subject to approval before appearing

Further reading

Features & Analysis
Stronger together? Reviewing Emirates' historic partnership with Qantas

Stronger together? Reviewing Emirates' historic partnership with Qantas

One year after the “historic” Emirates-Qantas partnership deal...

Air Arabia to use tried and tested model in Ras Al Khaimah

Air Arabia to use tried and tested model in Ras Al Khaimah

Air Arabia signed an agreement last month to become the official...

Is Saudi Arabia ready for take off?

Is Saudi Arabia ready for take off?

Saudi Arabia has announced two new airlines and $30bn worth of...

1
Most Discussed
  • 54
    Three UAE women attacked with hammer at London hotel

    I really feel that Arabian Business.Com should now close this comments page. This should be all about sympathy for the families not what it is/has turned... more

    Wednesday, 16 April 2014 1:06 PM - Adrienne
  • 51
    Why Dubai isn't a plastic city

    What is definitely not a plastic city. The Arabs have a culture dating back to several centuries. 50 years back Dubai was just a fishing village. Today... more

    Tuesday, 8 April 2014 3:49 PM - P. MADHUSUDAN
  • 48
    DMCC boss Ahmed Bin Sulayem entertains Robert Mugabe in Dubai

    @fga ''However today, simply because he decided to dispossess a few white farmers of their land and redistribute to the poorer indigenous blacks'' more

    Sunday, 13 April 2014 3:02 PM - Matt Williams