Airline Industry Review

Saudi Arabia to Open the Domestic Market for Foreign Carriers

In a historic move, always-heavily-regulated Saudi Arabia has decided to open its domestic market for foreign airlines. This would mean the availability of 8th and 9th freedom rights, better known as the cabotage, to any interested carriers.

Saudi Arabia’s new independent General Authority for Civil Aviation will make the routes available for application by late January. Saudi Arabian Airlines and low cost operator National Air Services (NAS) are the only two carriers presently serving the Saudi domestic market – and a regular complaint from the rulers as well as the public has been the lack of air service to rural points.

These rural air routes are often regulated with a price cap, and even state owned Saudi Arabian Airlines has been unable to make any of the routes profitable even while receiving fuel at subsidised rates. Last year, another private carrier, Sama, was forced to cease operations following economic difficulties.

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