An interesting development is taking place in Saudi Arabia, something at least I haven’t heard of in another part of the world so far. Saudi Arabia’s Aviation department is considering a move to open up the domestic skies to foreign carriers who may want to operated in Saudi Arabia, to create new capacity in the 27 million strong market for flying. Till so far, the Middle-East country only has Saudi Arabian as a full-service carrier, and Nas Air as the secondary carrier. A third carrier sama shut down last year after huge losses.
As per reports published in the ArabNews and The National, the Kingdom is proposing to initiate a tender process in January 2012, which will allow various airlines to file for domestic operations in KSA. They will be given a choice of routes they may choose to fly, and they could also run a hub and spoke for international operations out of any airport they choose to make their hub in Saudi Arabia. What may be important to note is that the country has price caps in place for various routes, so it will remain to be seen if the aviation industry in the region looks at this as an opportunity or not.
Saudi Arabian aviation authorities expect that even if this is not a huge opportunity for the full-service players in the region, it should be one for the new low-cost carrier such as FlyDubai and Air Arabia.
I’ll keep an eye on this from my perch, and report back about how this experiment is headed later.