Qatar Will Open Saudi Market If Kingdom Cuts Red Tape

 - August 6, 2012, 1:10 PM
Qatar Airways hopes to lead the way in opening the Saudi air transport market.

Qatar Airways is set to become the first foreign carrier to make lasting inroads into the Saudi Arabian air transport market, in moves that could overturn long-standing restrictions that have made the large and wealthy country something of a sleeping giant. Last month, the Arabian Gulf airline’s CEO, Akbar Al Baker, held talks with Prince Fahad bin Abdullah Al Saud, head of Saudi Arabia’s General Authority for Civil Aviation, to discuss what the company described as “opportunities arising from the kingdom’s newly launched aviation liberalization policy.”

The famously plain-speaking Al Baker made clear to Prince Fahad that he would divert Qatar Airways’ resources into redeveloping the Saudi airline sector only if the kingdom’s government agrees to remove the regulatory shackles that have held back any serious entrepreneurial approach to the market. More specifically, Al Baker wants a “fundamental rethink” of policies such as capping of domestic air fares and inflated charges for aviation fuel.

Prospects for reform appear promising, considering Prince Fahad’s mandate to push through liberalization of Saudi Arabia’s aviation sector. The country has four international gateways and around 30 domestic airports. However, in the past decade, fare-capping has led to the collapse of Saudi low-cost operator Sama Air and financial difficulties at NasAir. Founded in 1997, Qatar Airways operates 109 aircraft to 117 destinations from its base in Doha. It now lays claim to being the Arabian Gulf region’s most dynamic carrier, challenging the hegemony of Emirates Airline.