Saudi promises cheap fuel for new airlines

Saudi Arabia's government has promised to offer discounted jet fuel to foreign airlines setting up in its domestic market, Arab News reported, as the kingdom pushes ahead with its fledgling open skies policy.

“All domestic operators will be given jet fuel at equal rates and the price will be much less than what is available in the neighbouring regions,” Prince Fahd bin Abdullah, president of the country's General Authority for Civil Aviation (GACA), was quoted as saying.

Bahrain's Gulf Air and Qatar Airways were in December the first international airlines to be awarded licenses to operate services in the country. Despite being the Gulf's most populous country, Saudi Arabia is under-served in terms of air travel, with flag carrier Saudi Arabian Airlines and low-cost nasair currently the only carriers serving domestic requirements. A third operator, SAMA, went bust in 2010.

The barriers for airlines entering the country have included caps on domestic ticket prices and fuel subsidies for government-owned Saudi Arabian Airlines, although the GACA said in late 2012 that it would permit increases in the cost of tickets.

Prince Fahd was quoted as saying by Arab News that Saudi was seeking to raise aviation's contribution to the national economy from its current SAR30bn (US$8bn) to a "much higher amount".

The government is also in the process of privatising both Saudi Arabian Airlines and the country's airports in a process that could take up to five years.