MSYYZ
Topic Author
Posts: 665
Joined: Sat Oct 22, 2005 11:16 pm

Saudi Arabian To Be Privatized

Sat Mar 25, 2006 10:37 am

After Egypt Air , MEA and Royal Jordanian ,yet another Middle Eastern Airline is talking about Privatization .

The Supreme Economic Council (SEC) has approved the executive program to privatize Saudi Arabian Airlines, amongst other decisions taken by the SEC. Like endorsing the executive program for the expansion and upgrading of the Haj Terminal at King Abdul Aziz International Airport in Jeddah.

Saudi Arabian Airlines has already taken a series of steps for its privatization, currently, the airline is focusing on transforming non-core units including catering, ground handling services and maintenance as well as the Prince Sultan Aviation Academy in Jeddah, into commercial units and profit centers. The airline announced that to this date, it has completed one of the three phases of its privatization plan, which included studies on the airline's financial, administrative, operational and organizational aspect as well as restructuring of its administration, finance and operation.

During 2005, Saudia posted a record revenue of SR 14.6 billion, which is SR 1 billion more than the figure of 2004, and it also achieved a net profit SR 500 million. This comes after MS , MEA and RJ were all in the black with good profit in 2005 .

What do you think Hijazzey ?


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a300
Posts: 364
Joined: Sun May 09, 2004 9:24 am

RE: Saudi Arabian To Be Privatized

Sat Mar 25, 2006 11:25 am

Privatisation will only make sense if the aviation controls are relaxed in Saudi Arabia. It is very difficult for foreign airlines to compete. EK has only 5 RUH-DXB flights a week while SV has 14. Similarly, ME increased its RUH-BEY flights from 4 to 5 per week. They would like to go daily, but they cannot. LH has no rights on the DXB-MCT portion of its FRA-RUH-MCT flight. The fares are also high. There is no real competition here.
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BA
Posts: 10166
Joined: Fri May 19, 2000 11:06 am

RE: Saudi Arabian To Be Privatized

Sat Mar 25, 2006 11:35 am

Quoting A300 (Reply 1):
Similarly, ME increased its RUH-BEY flights from 4 to 5 per week. They would like to go daily, but they cannot.

They were just recently granted the right to add a 6th weekly flight and it will start April 4.

But you're right, MEA wants to make it daily, but cannot do so. Maybe later this year, they will be granted the right to a 7th weekly to make it daily.
"Generosity is giving more than you can, and pride is taking less than you need." - Khalil Gibran
 
HiJazzey
Posts: 675
Joined: Fri Sep 09, 2005 3:00 am

RE: Saudi Arabian To Be Privatized

Sat Mar 25, 2006 2:22 pm

This is not new. The privatisation plan outlined above have been public for years now, but SV was seen dragging it's feet on this issue. Maybe the SEC will push this forward now.

As for aviation controls, I would love them to loosen, open skies even, but that isn't going to happen without reciprocation, and the other arab countries are just as bad. The examples listed above distort the picture. For example I could tell you that ME has more flights on the JED-BEY route than SV does. Doesn't give you the full picture.
 
MarkATL
Posts: 486
Joined: Sat Jul 03, 2004 10:07 am

RE: Saudi Arabian To Be Privatized

Sat Mar 25, 2006 2:29 pm

SV out of government hands. I can hear the new management now....Boeing? Who's Boeing....Never heard of 'em.
"...left my home in Georgia, 'n headed for the "Frisco" Bay...
 
PanAm747
Posts: 4713
Joined: Mon Mar 01, 2004 4:46 am

RE: Saudi Arabian To Be Privatized

Sat Mar 25, 2006 2:31 pm

Interesting term - privitization. Will any foreign or non-muslim group be allowed any kind of ownership at all?

And if it is sold only to Saudi Arabians, will that mean every prince in the country gets to own a piece of the airline?

I wish the airline well - it functions well consider the unique circumstances that is the country of Saudi Arabia.
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HiJazzey
Posts: 675
Joined: Fri Sep 09, 2005 3:00 am

RE: Saudi Arabian To Be Privatized

Sat Mar 25, 2006 3:17 pm

Privatisation means they will be turned into a joint stock company and listed on the Saudi stock exchange. What percentage of the company will be made available at IPO, I don't know, but the government would no doubt have a significant stake in the company or at the very least a golden share. So a takeover by a foreign carrier would be unthinkable.

BTW, the business community in Saudi is composed mainly by the traditional merchant families, not the royal family.
 
khi747
Posts: 1532
Joined: Tue Oct 31, 2000 6:30 am

RE: Saudi Arabian To Be Privatized

Sun Mar 26, 2006 12:37 am

This is great news and i think SV has so much unrealized potential as an airline that can only be fixed if its privatized.

As to how the airline would be privatized,they would offer it to a certain group of investors who in all probability would be from GCC only if not Saudi entirely. But i think someone like Prince Waleed bin Talal would be VERY interested in a privatization like this in the kingdom
 
HiJazzey
Posts: 675
Joined: Fri Sep 09, 2005 3:00 am

RE: Saudi Arabian To Be Privatized

Sun Apr 02, 2006 5:27 pm

Just a quick update...

According to local papers, SV has submitted it's application to list on Tadawul to the CMA. They're planning to offer 30% in an IPO later this year.

It appears they're moving ahead.
 
Billy
Posts: 890
Joined: Sun Jul 23, 2000 11:18 pm

RE: Saudi Arabian To Be Privatized

Sun Apr 02, 2006 5:44 pm

Sama is struggling to gets its approvals from the GACA. They want to base a plane in DMM, amongst others. No international flights will be approved until they have a dometic track record.

And Almost all GCC flights are heavily restricted. Oman Air wants daily DMM-MCT, but is restricted, hence it is in BAH. QR wants three daily DMM-DOH, and KU wants daily DMM-KWI, for example.

The Saudis are playing hard ball with GCC carriers who 'steal' sixth freedom traffic. I am not sure that this situation will change much in the short term either.

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