Saudia Private Aviation (SPA), the business jet arm of Saudi Arabian Airlines, is seeing increased interest from businesses in the Kingdom in acquiring new aircraft, as it prepared to open the largest FBO in the country, at Jeddah.
“SPA’s operations will grow 100 percent year-on-year this year,” said Wajdi Al Idrissi, SPA CEO, speaking to AIN on Sunday here at the MEBA show site. “The company’s clientele includes government and executive delegations. Most of them are businessmen, who can make up to four stops in a single day.
“The government is spending the money and there is no decline in growth,” he continued. “In Saudi Arabia, private aviation is growing at 15 to 20 percent a year.”
Saudia Private Aviation added a fourth Dassault Falcon 7X to its fleet in March during the first-ever Abu Dhabi Air Expo at Al Bateen Executive Airport, becoming owner of the largest 7X fleet in the world. The company also owns six Hawker 400XBs and manages 28 other aircraft, from Hawkers and Citations to Boeings and Airbuses. The owned fleet is managed under a GACA Part 135 license and the managed fleet under Part 91. “We encourage people to go with [our] fleet management,” he said.
Al Idrissi said Dassault has informed SPA that it is not only the largest owner, but also the most effective operator of the aircraft, employing the Falcon 7X fleet for up to 650 hours a year. The Hawkers are used more modestly at around 300 to 400 hours a year, he said, and have seen only single-digit growth in activity. The 14- to16-seat Falcon 7X has a 12-hour range, but under its Part 135 certification SPA is not allowed to fly the aircraft more than 10 hours on a single flight.
“The Hawkers, which are more practical and use less fuel, are employed for short-range, two- to three-hour flights within the Middle East, while the Falcon 7Xs are used on international routes,” he said. “Some 65 percent of our operations are domestic, [the vast majority] involving flights on the Jeddah-Riyadh route,” he said. Riyadh-Dammam, Riyadh-Dubai and Jeddah-Dubai are also important city pairs. Costs to hire the aircraft are $8,900 per hour for the 7Xs and $3,700 for the Hawkers. “These aircraft are very competitively priced, and almost 25 percent cheaper to charter than in Europe.”
Revamp of Saudi Civil Aviation
These are momentous times for Saudi aviation, as an economic boom drives the Kingdom forward. Al Idrissi said that Prince Fahd bin Abdullah, chairman of Saudi Arabia Airlines and head of the General Authority for Civil Aviation, has made commercial aviation a priority since a revamp of the Kingdom’s civil aviation sector after the death of the Minister of Defence, Crown Prince Sultan, last November, but that he is also keeping an eye on business aviation. However, “the priority is more commercial than business aviation,” he said.
Saudi Arabia’s aviation industry is in the middle of a major privatization program. Saudi Aviation Engineering Industries is to be sold to private hands soon. “They are looking for a strategic partner,” said Al Idrissi. “The Prince Sultan Aviation Academy [one of the Kingdom’s leading training establishments] will be privatized within one year.” In March, Al Idrissi told AIN he expected an IPO involving sale of mother company Saudi Arabian Airlines, owned 100 percent by the government, “within three years from now.” Saudi Airlines Catering Co. was privatized in 2007.
Founded in 2009, SPA, a subsidiary of Saudi Arabian Airlines, was created on the back of what was previously known as Saudi Arabian Airlines’ “Special Flight Services.” Al Idrissi has served as CEO since inception, having formerly been vice president of royal and VIP affairs at Saudi Arabian. “We managed three Gulfstream IIs for government agencies,” he said. “We commercialized [the company] under the name Saudia Private Aviation in 2009.”
Saudi Arabia’s buoyant economy is undergoing a massive infrastructure overhaul. King Abdullah has used the global economic downturn to carry out a raft of infrastructure projects at bargain-basement prices, said Al Idrissi. Major airports are “building sites” as new terminals are put in place. While commercial aviation is the national priority, this also means upgrades for many FBO facilities, including the VIP or FBO facilities already existing in the form of “Royal Gates” or “Royal Terminals.”
“At Jeddah, Arabasco and Jet Aviation already operate FBOs. We will launch the biggest FBO in Saudi Arabia in Jeddah in January 2013. We are the operator and ground-handler.” Upgrades to existing FBOs in Riyadh, Dammam and Medina (Saudi Arabia’s “international gateways”) will be completed in the next three years, he added. At the same time, there is a massive influx of non-Saudi, commercial Gulf operators into Saudi Arabian airports outside the big four international gateways, highlighting the antiquated condition of many of the kingdom’s airports. Some 70 percent of Saudi Arabian Airlines’ passengers are domestic, he said.
The Challenge of Illegal Charter
A GACA consultation document published in 2007 said Saudi general aviation would double during the coming 10 years. It contained guidelines for a reassessment of fees to allow GACA to recover the costs of regulatory oversight, the award of licenses for new flight training schools, and permissions to “allow the building and operation of own general aviation infrastructure” in the kingdom.
GACA is taking up the challenge of gray market infractions. In speaking of problems with illegal flights, Al Idrissi makes a point of referring to the “black” market. “Some say that around 50 percent of worldwide business jet flights are illegal.” Asked for the figure in the kingdom, he said, “Saudi Arabia is a part of the world.” GACA is taking steps to improve flight inspections, which includes preventing cabotage inside the kingdom by international operators. “We are not allowed to fly from Dubai to Abu Dhabi [so why should they be allowed to fly Saudi domestic routes?]”
Al Idrissi said he believes that only about 200 business jets are operating in the kingdom with full Saudi registration, while a further 300 are registered abroad. “GACA is conducting more inspections. The issue [was] raised at the MEBA conference [on December 10],” he said. “It’s not fair to others when someone comes in and offers reduced prices. Issues of taxation, employment and safety are all affected. We want to be proactive, not reactive. Half price, my friend? Not allowed.”