Saudi Airlines plans combined IPO of Saudia, Flyadeal

Saudi Arabian Airlines Group, owner of flag carrier Saudia and new low-cost carrier Flyadeal, is planning to privatise both in a single transaction, according to reports.

Saudi daily Arab News cited company documents as confirming the privatisation of the two airlines as well as cargo, maintenance, training, medical and real estate units in sales and public offerings.

The company is planning to complete the plan by 2020, with an initial public offering of Saudia and Flyadeal deemed likely.

The Saudi Royal Fleet will remain under state control, according to the publication.

Arab News said the establishment of a limited liability company had already begun and a new entity – Saudi Arabian Airlines Corporation – is planned to be established this year.

“One significant part of the group’s privatisation plan is to incorporate SAAC to become the group’s parent company. There are no explicit decisions for this yet, but the estimated timeline is by 2020,” a Saudi spokesperson was quoted as saying.

Privatisation efforts are said to be already underway at some subsidiaries through external advisors.

These efforts will include changes to the management structure and culture at the company from “divisional management to a client vendor relationship,” and from a “single marketing model to an alliance marketing model”, according to the publication.

Flyadeal is the region’s newest low cost airline after beginning operations on Saturday with flights between Riyadh and Jeddah.

Read: New Saudi carrier flyadeal receives first plane from Dubai Aerospace