SPA Launches Second Five-year Plan In 2014

 - May 22, 2014, 6:55 AM

Saudia Private Aviation (SPA) has embarked on a second five-year plan this year to improve service and concentrate on new lines of business. It expects to be a leading player as the number of Middle East-based private aircraft grows to around 800 aircraft in 2020, CEO Faisal Kayal said.

In a Saudi press interview earlier this year, Kayal said SPA would focus on four areas: private aircraft leasing; management and operation; ground services and logistics; and maintenance. He added that it was putting the “final touches” to its new five-year plan.

The operator’s plan focuses on improving its products, expanding its customer base and raising market share. “Our strategy is centered on [these] four points,” he said.

In an interview with Middle East television network Al Arabiya News at last November’s Dubai Airshow, Kayal said the company began its planning effort in 2008 and that a new “five-year strategic business model” would come into force in 2014.

He said that of 400 private aircraft then operating in the Middle East, 60 percent were owned “directly or indirectly by Saudi businessmen.” He added that SPA was considering a future IPO but admitted no date had yet been set for this.

As an arm of Saudi Arabian Airlines that is dedicated to the private sector, SPA seeks to contribute to the “economic development of the kingdom by building the infrastructure for private aviation services,” and aims to provide “accessibility to airports that are not covered by the commercial aviation sector in the kingdom and abroad.”

According to the Air Charter Guide, the operator’s core fleet of 10 aircraft comprises four Falcon 7X trijets and six Hawker 400XPs. The company also has access to other aircraft in the Saudi Arabian Airlines fleet and can operate charters on demand using the Embraer 170, Airbus A320/A330 and Boeing 777 and 747.

SPA was set up by the Saudi national airline in 2009. In 2011, it signed an agreement with Comlux to develop the VIP charter market in the Middle East by giving SPA access to the Comlux VIP fleet operating out of Bahrain. Comlux Middle East’s Bahrain facility regularly conducts flights to Europe and beyond, and is well positioned at only 25 km over the causeway for Saudis based in Dammam, Al Khobar and oil-and-gas giant Saudi Aramco’s Dhahran headquarters.

Competition

Sulaiman Al Hamdan, Group CEO of NAS Holding, which owns several subsidiaries in commercial, MRO and religious tourism, as well as NasJet (SPA’s leading charter competitor), told AIN that SPA parent Saudi Arabian Airlines received substantial fuel subsidies for its operations, which are not enjoyed by its competitors, but Al Hamdan said he was not sure whether SPA enjoyed the same benefit from the Saudi government.

In an effort to improve services, which include the sale of “block hours” to passengers who travel frequently, SPA signed a deal in February to obtain financial solutions with the Saudi arm of credit card services company American Express.

“At present there are nearly 400 private jets and their number will touch 800 by 2020,” Kayal said, speaking at a press conference to announce the agreement. He said that the region’s private jet market is growing by 8 percent a year, somewhat higher than the global average.

In December, SPA signed an agreement with Mohammed Yousuf Naghi Motors, authorized dealer of Jaguar and Land Rover in Saudi Arabia, to operate a fleet of 20 new Jaguar XJs to transport its clients between SPA FBOs and their private jets across the kingdom. The service reportedly is to be available at SPA terminals at King Abdulaziz International Airport in Jeddah, King Khalid International Airport in Riyadh, King Fahd International Airport in Dammam and at Prince Mohammed Bin Abdulaziz Airport in Medina.