New SaudiGulf airline gets licence to begin domestic flights

New carrier SaudiGulf Airlines is set to soon begin operating flights in the kingdom as part of the country’s plans to liberalise its domestic aviation market.

The Saudi General Authority of Civil Aviation (GACA) has confirmed that the new airline will be awarded a national carrier licence on June 22, following a long-pending approval process.

Read more: SaudiGulf Airlines plans to begin flights at start of November

The company has completed all the necessary conditions and requirements for an Air Operator Certificate (AOC), GACA said.

Owned by the Abdel Hadi Abdullah Al-Qahtani & Sons Group of Companies, Saudi Gulf Airlines will operate from the King Fahd International Airport in Dammam.

It is initially expected to launch daily flights to Jeddah and Riyadh before expanding to Abha, Madinah, Gassim and Tabuk.

The airline also hopes to introduce international flights in the future.

SaudiGulf’s fleet includes four Airbus A320s with a further 16 CS300s on order from Bombardier.

GACA did not reveal any details about the second entrant to the market, Qatar Airways-backed Al Maha Airways, which is also awaiting an AOC.

Read more: Qatar Airways puts Saudi plans on hold

Currently, national carrier Saudia enjoys the biggest share of the country’s domestic aviation sector, with low-cost carrier flynas the only other operator in the country.

“The AOC will certainly help SaudiGulf get operational, but the real challenge is whether Saudi authorities provide the necessary access points around the country for the airline to actually grow and expand,” said chief analyst at StrategicAero Research Saj Ahmad.

“Saudi airlines are so behind the GCC aviation growth curve, it’s difficult to see how SaudiGulf can change the status quo. We only need to look at how languid the growth at flynas has been to understand that the Saudi dynamics of airline expansion is choked with apathy and red tape. And it’s key to remember, Saudi Arabia is not a sought-after tourist destination like the UAE is, so SaudiGulf will be battling at the fringes to capture low yield traffic away from the likes of flynas and Saudia – that will put pressure on revenues and the capacity to expand.”

He added: “I’m quite sceptical of this airline and struggle to see a business case for it and would be very surprised to be talking about them in 2020.”