“The Saudi aviation strategy is ambitious, we want to triple our number of destinations and quadruple the number of cargoes by 2030.We have a lot to do, such as expanding airports and our fleet” : Abdulaziz A. Al Duailej earlier in the month during the Aviation conference.
Aligning to such ambitions, today Saudi Arabia's General Authority of Civil Aviation (GACA) has announced some landmark reforms to help its aviation sector boost competitiveness, attract investors and increase transparency as part of a transformation plan that aims to attract $100 billion in private and public investments by 2030.
Key reforms by GACA include the introduction of competition standards at airports, anti-competitive pricing measures, streamlining the economic license for air transport operations, as well as expanding the qualifying rules for airport operators to help privatise more of kingdom’s airports.
According to GACA, the new economic policy framework is designed to boost competition,create open markets for growth and innovation, increase transparency in commercial relationships and pricing, delivering better resource allocation, investment, and financial sustainability across the sector.
In November 2022, Saudi Crown Prince and Prime Minister HRH Mohammed bin Salman bin Abdulaziz Al-Saud had made an announcement on the plans to transform Riyadh airport into a massive aviation hub with six parallel runways and designed to accommodate up to 120 million travellers by 2030.
For the new Saudi Arabia , Aviation is part of the government strategy to become a global transportation and logistics hub by 2030, with Riyadh airport as the operation base of a brand new airline, Riyadh Air, that would compete with regional brands like Emirates and Qatar Airways.
GACA is saying that new opportunities for investors and operators will be created through the policy framework by levelling the playing to drive more competition.
Unveiling the key reforms, GACA President Abdulaziz Al Duailej said these align with global best practice and are aimed at driving further investment, growth and performance across the aviation sector.
"These economic regulations will enable the realisation of the Saudi Aviation Strategy, which is mobilizing $100 billion in investment from public and private sector sources by 2030," he stated.
"The regulations create an open, dynamic and competitive market, setting a level playing field for global operators and investors in the Kingdom. These changes will create more competition, choice and value for passengers and consumers," he added.
The kingdom has set itself high targets for diversifying its economy and reducing its dependence on oil, pouring hundreds of billions of dollars into a plan called Vision 2030 initiated by the kingdom's de facto ruler Prince Mohammed.
Among the various reforms are the qualifying rules for airport operators that have been expanded to support the privatization of the kingdom’s airports alongside streamlining processes for new entrants to conduct business.
"Airports will be enabled to propose charges in line with GACA’s policy frameworks, and will have more flexibility to diversify revenues by growing non-aeronautical revenues. Airport performance will also see a significant overhaul, with airport quality targets linked to a new incentive scheme," explained Al Duailej.
He pointed out that ground handling services and air cargo will be opened to competition, with a ‘general freedom of access’ principle being supported by competition levels across the kingdom’s airports.
Saudi Arabia, led by Crown Prince and Prime Minister Mohammad Bin Salman , has already announced the establishment of Riyadh Air, a wholly owned company by the Public Investment Fund (PIF).
On 14 June 2023 , Riyadh Air, launched by the Saudi Public Investment Fund (PIF), had announced an order of up to 72 Boeing 787-9 Dreamliner airplanes in a multi-billion dollar deal.
Among other reforms shall be the License processes for ground handling and air cargo service providers, which the Regulatory Authority promises to be streamlined, he added.
According to GACA, foreign carriers will benefit from streamlining the processes including removal of economic licence requirement for charter flights, thus reducing the cost of doing business.
General aviation operators will benefit from the removal of ‘empty-leg’ restrictions, giving more flexibility when operating international flights to enhance network connectivity. A new certificate will also be introduced to allocate international traffic rights on constrained routes for national carriers to ensure equal opportunities, it added.
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