Two new airlines due to enter the Saudi domestic market will begin services by the end of the year, General Authority of Civil Aviation (GACA) director general Sulaiman Abdullah Al Hamdan has reportedly said.
Al Hamdan blamed the delay on the airlines not meeting regulatory requirements to receive their operating licences. They had been due to start services in 2014.
A GACA source told Saudi Gazette the new carriers had delayed their entry to upgrade their plane deliveries, while all technical approvals had been completed.
The new domestic licences were awarded in 2013 to help meet growing demand for internal flights in the developing kingdom. It would be the first time a foreign airline could operate domestic services.
The first of the airlines, Al Maha Airways, is a subsidiary of Qatar Airways.
There have been conflicting reports on the name of the second airline, launched by a private Saudi consortium called Abdel Hadi Abdullah Al Qahtani & Sons Group of Companies, and advised by Bahraini national carrier Gulf Air. It has been named as Al Khaleej Airlines and Saudi Gulf Airlines in various reports.
The new airlines will compete against state-owned Saudi Arabia Airlines (Saudia) and privately-owned low cost carrier FlyNas.
Saudia receives government subsidies on oil but also is subject to fixed ticket prices.
Al Hamdan said the new airlines would have to compete.
“Specifying the air fares is not the responsibility of GACA but is directly related to the prices charged by operating companies,” he was quoted as saying by Saudi Gazette.
“There will be competition between the two new companies and the current airlines, Saudia and Flynas.”
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