Saudi Arabia to transform int'l airports into state-owned firms

JEDDAH — Saudi Arabia plans to transform international airports in the Kingdom into state-owned companies, as a step towards privatisation of these airports, according to Abdullah Ruhaimy, president of the General Authority of Civil Aviation (GACA).

By Habib Shaikh

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Published: Sun 4 Mar 2007, 8:48 AM

Last updated: Sat 4 Apr 2015, 10:41 PM

The Arabic magazine Al Majalla quoted him as saying in its recent issue that GACA would start commercial operation of airports within three years.

"The international airports will be given corporate identity with independent financial status before being transferred to the ownership of companies fully owned by the state," he said.

Ruhaimy said the new plan would improve management of these airports. "This will eventually help the state take a decision on privatisation of these airports," he explained.

He said the authority was studying a proposal to set up business cities within the Kingdom's airports. "There is a plan to establish an exhibition centre and a hotel at King Fahd International Airport in Dammam," he said, and added that many businessmen in the Eastern Province had expressed their interest in the project.

"We have sought private sector participation for the development of the Haj Terminal at King Abdul Aziz International Airport (KAAIA) in Jeddah," he said.

The Haj Terminal project, as well as a desalination plant project, will be carried out by the private sector on a build, operate and transfer (BOT) system.

He said the authority would soon announce the company that has won the contract for building and managing new terminals at King Abdul Aziz International Airport. The new Jeddah airport expansion aims at receiving 80 million passengers annually and 63 aircraft of varying sizes daily.

Early this year, Crown Prince Sultan signed a SR902.91contract with Al Mabani Company to develop and upgrade aviation facilities at KAAIA.

GACA said in a statement said that the contract covers expansion of the airport's tarmac and runways in order to increase its annual capacity to 80 million passengers.

The work will also include construction of a new aircraft parking facility west of the Haj Terminal as well as modernisation of ground lights systems and information technology infrastructure. Under the project, a 6.5 km square metre area will be set aside for commercial projects including hotels and offices of companies.

The new expansion project, which is estimated to cost SR18 billion will enable the airport to receive large jumbo jets, including the A380, the 555-seat Airbus jet taking to the skies this year.

The expansion involves the construction of two new terminals and renovation of the existing South Terminal, a new concourse with 25 gates, three connector buildings and an extensive upgrade of landside and airside infrastructure facilities.

Saudi Arabia has so far spent more than SR50 billion on airports. GACA plans to invest SR30 billion in expanding airports in Jeddah, Madinah and Tabuk in order to meet the increasing number of passengers and the requirements of two new domestic private airlines.

The Riyadh-based NAS Air, Saudi Arabia's first no-frills airline started operating commercial domestic flights to Jeddah three times daily from February 25 and from the end of this month, will start operating daily flights to Madinah, Jizan and Rafha.

Initial fares between the capital and Jeddah are SR 99 and the carrier has promised low promotional fares available year-round, through its web site, call centre, and travel agents.

"Simply put, the earlier you book, the less you will pay, particularly if you book online," explained Peter Griffiths, CEO of NAS Air.

Griffiths said that NAS Air's services were similar to other budget carriers around the world, with no tickets issued.

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