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Saudi Arabian Airlines Privatization

Saudi Arabian Airlines to be privatized by 2013

May 29, 2011

JEDDAH - Saudi Arabian Airlines has said the company’s privatization program is going ahead as scheduled with the core aviation unit set to be privatized no later than 2013.

“We have already privatized the catering and cargo sectors. Privatization of the ground services are in advanced stages. We are also working on privatizing the Prince Sultan Aviation Academy and the maintenance unit. We are making intensive preparations for the privatization of the core airline unit by modernizing its fleet and developing its technical infrastructure by presenting a proposal to the Supreme Economic Council (SEC) to complete the privatization process,” Abdullah Al-Ajhar, vice president of public relations told Arab News.

Privatization of the airline’s five units of cargo, catering, ground services, aviation academy and maintenance was expected to be completed March of this year according to comments made by the director general, Khaled Al-Mulhem last year, however delays have kept the airline from completing its plan, Al-Ajhar confirmed.

“Saudi Arabian Airlines is a major state-owned organization involved with many activities. It’s privatization is not an easy task with delays being quite natural,” Al-Ajhar said, without commenting on the specific cause of the delays. He added that the airline has appointed international experts and consulting firms to assisting in speeding up the privatization process.

“Due to many factors, it (the process) will take its own time, however I am hopeful that within one or two years the whole process would be completed,” he said.

The airline’s fleet modernization, according to the vice president has become a major strategic objective of Saudia in order to maintain its leading position in the industry.

“We have already signed major deals to purchase 88 new aircraft including 35 Airbus 320s, 15 Airbus 321s, 8 Airbus 330s, 22 Boeing 777-300s and 8 Boeing 787 Dreamliners. Among them, 48 planes include 32 Airbus 320s, 8 airbus 330s and 5 airbus 321s have entered the airline’s domestic and international network, bringing the total number of aircraft on its fleet to 125, Al-Ajhar said, adding that the airline will continue to purchase modern aircraft from leading international manufacturers to meet future requirements. After the successful privatizing of its catering and cargo units in 2009 and last year, the flag carrier has said that it will sell 450 million shares or 30% of the company’s catering arm in an initial public offering however the airline has remained tight-lipped regarding the share price and opening date of the IPO.

“All measures have been taken for the IPO of Saudi Airlines catering company in coordination with the Capital Market Authority (CMA). We are planning to sell shares to enable Saudi citizens to own shares of the company. The share price of the company’s shares will be made public when we announce the date of the IPO,” Al-Ajhar said.

Moving forward, the airline said that their major task into 2012 is to become a member of the international SkyTeam Alliance.

“We have already signed an initial agreement with the alliance on Jan. 10, 2011 and a code-share agreement with Air France-KLM on Dec. 12, 2010. SkyTeam membership will enable Saudi Airlines to make use of the alliance’s 898 stations in 169 countries and its 420 lounges for first and Business class passengers, Al-Ajhar concluded.

Saudi Arabian Airlines to be privatized by 2013
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