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Thu 22 Aug 2013 09:51 AM

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Gulf Air denies Saudi domestic licence win

Bahraini carrier says only acted as consultant for third party

Gulf Air denies Saudi domestic licence win

Bahraini carrier Gulf Air said that it has not been awarded a licence to operate domestic air services in Saudi Arabia, contrary to an announcement made by the kingdom’s aviation regulator more than six months ago.

In an emailed statement on Tuesday, Gulf Air said that it had only acted in a consultative capacity for Al Qahtani Group, a consortium of privately-owned companies within Saudi.

Gulf Air said that its name and branding would not be used in any new domestic service in Saudi and that it was currently in negotiations with Al Qahtani Group to extend its consultations into supporting the latter in securing its air operator’s certificate.

According to its website, Al Qahtani Group is a Dammam-based conglomerate with interests in logistics, agriculture and construction.

Saudi Arabia’s General Civil Aviation Authority (GACA) announced in December that Gulf Air and Qatar Airways had won a tendering process to setup new airlines in the country. It is not clear why Gulf Air has waited more than eight months to clarify the matter.

In April, the director general of GACA said both airlines would begin operations by the end of the year.

Saudi Arabia, the biggest Arab economy with a population of more than 27m, still has one of the smallest airline networks in the region relative to its size.

More than 54m passengers passed through Saudi Arabia's 27 airports last year, according to data from GACA, rising 13.6 percent from 2010.

Currently only two airlines - the national carrier Saudi Airlines and budget airline National Air Services (NAS) - service a domestic market of about 27m people.

With a price cap on domestic flights, private airlines have struggled with their profit margins. In 2010, a third carrier, Sama Airlines, was declared bankrupt.

Saudi Airlines, which is undergoing a slow privatisation process, receives fuel at subsidised prices unlike private carriers, allowing it to offset the cost of tickets.

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