RIYADH – The awarding of Saudi Arabia's newest domestic airline license has been extended until next month, it was reported. Earlier this summer, it was confirmed that Qatar Airways, Bahrain Air and Gulf Air are among the firms in pre-qualified consortia bidding for the new airline licence in Saudi Arabia. This month the General Authority of Civil Aviation (GACA) said 14 companies had applied for licenses to operate domestic and international flights in the country, seven of which have been short-listed. The list of the seven pre-qualified consortia also includes Chinese firm HNA, the parent company of Hainan Airlines Company, Islamic Development Bank, Nesma Holding, and UAE's private carrier Falcon Express. Saudi Arabia still has one of the smallest airline networks in the region relative to its size. Saudi Arabian Airlines, the national carrier, and private low-budget carrier nasair are the only options for flying within the country, where demand for flights is high. More than 54 million passengers passed through Saudi Arabia's 27 airports last year, according to data from GACA, rising 13.6 percent from 2010. In 2010, the Kingdom's third carrier, Sama Airlines, was forced to suspend operations. Most of those seeking a license are eyeing low-cost flights in the Kingdom, where business travel is rising and religious tourism is booming. Qatar Airways announced its plans to enter the Saudi domestic aviation sector earlier this year. GACA will meet with the seven pre-qualified consortia in August and the deadline to submit bids will start in September, the official stated. The announcement of the winning firms or consortium will be in October while operations are expected to start at the end of next year. When the successful bidder fornew domestic license is announced it will be able to buy fuel at the same discounted price as national carrier Saudi Arabian Airlines, Riyadh-based Eqtisadiah newspaper reported last week. The move is important as the higher fuel costs was a major factor in the demise of Saudi low-cost carrier Sama Airlines in August 2010. “Sama, and all other airlines throughout the region, experienced very low fares and somewhat slow demand for regional travel during the winter season (October 2009 through March 2010). Although revenues were up sharply during the summer peak season, it has not been enough to offset the heavy losses we suffered during the winter,” Sama CEO Bruce Ashby said at the time. – SG
