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Saudi Liberalisation Must Be Met With Higher Safety Standards

Saudi Arabia enjoys the largest domestic market in the Middle East, yet regulatory impediments means it still has not managed to replicate the rapid growth of its neighbours.

Guest Contributor FLTechnic takes a look at the Saudi Arabian aviation market

Nevertheless, as a result of the long-awaited reform, Saudi’s General Authority of Civil Aviation (GACA) expects annual traffic to reach 100 million passengers per year by 2020. The increasing scope of operations still presents a lot of challenges, including those covering safety.

Only the national carrier, Saudi Arabian Airlines, and a single budget airline – flynas – serve Saudi Arabia’s population of 28 million. This contrasts with the UAE’s four carriers, which serve nine million people. With its domestic economy buoyed by high oil prices, a growing and increasingly affluent population, and an improving infrastructure the outlook for Saudi’s aviation industry is strong.

Passenger traffic carried by local airlines increased at an annual average growth rate of 12.2 per cent between 2008 and 2012. The most significant change for Saudi Arabia’s market is set to come in 2014. Under the on-going regulatory reform process two new players, Saudi Gulf Airlines and Al Maha Airways, have already been awarded licences to operate domestic and international flights and are expected to intensify the competition in the market.

“The increasing activity within the Saudi Arabian civil aviation sector will naturally affect the demand for appropriate line maintenance support of the intensified operation, requiring an increased number of skilled personnel and staff to maintain the new aircraft. However, while job opportunities in the aviation sector are on the rise, so is a shortage of people equipped with the right skills within the regional. The Middle East is expected to require over 53,000 additional technical personnel over the upcoming two decades,” says Asta Zirlyte, head of FLTechnics line maintenance department. “At the same time, while establishing a new line station might cost up to $80,000 in equipment and tooling, training of the appropriate amount of qualified professionals might add a significant amount to this number, not mentioning the time it requires.”

Al Maha Airways plans to have 10 A320s flying during its first 12 months of operations, and expects to add another 10 to 15 narrowbody aircraft followed by a number of widebodies. If all goes according to plan, the complete Al Maha Airways fleet should consist of around 50 aircraft. SaudiGulf Airlines has ordered 16 CS300s from Bombardier and intends to base itself at Damman, initially operating a limited schedule of three to four flights daily to Jeddah and Riyadh. A planned international expansion will cover routes in the Middle East, as well as Africa and South Asia.

Flynas has embarked on a plan to take over 20 per cent of Saudi traffic and carry 20 million passengers by 2020. The airline currently covers 23 destinations in the Middle East and is moving into the long-haul market seeking to serve an impressive eight destinations in five countries. The airline’s aircraft utilisation has already improved, increasing from 5.4 hours per day in 2009 to more than 13 hours per day in 2013.

Foreign LCCs are also watching the market. Cebu Pacific plans to operate to Dammam and Riyadh from Manila, targeting the 1.5 million migrant Filipino expatriates thought to be living in Saudi Arabia.

Currently, many of the Gulf airports have either already surpassed, or are nearing full utilisation. As for Saudi Arabia, the airports in the country have lately been operating at an average passenger capacity 130 per cent. To cater to the growing traffic, Saudi Arabia is making huge investments to expand its airports.

Reducing turn-around times might take some of the pressure off the insufficiently developed infrastructure, while this issue is being dealt with. This is exactly what third-party line maintenance providers might offer. Having much experience of working with LCCs, third-party line maintenance providers’ main focus is on minimising the carriers’ maintenance-related downtime.

“The carriers would then be provided with the necessary reaction speed and faster AOG resolutions, which would result in significant cost savings to the carriers, as well as the ability to focus on their primary activities. In addition, the HR-related issues could be managed in a timely manner, as independent providers often already have all the necessary capabilities to cover the possible fleet-related changes of their clients,” Zirlyte concludes.

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