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Dubai: Six companies are vying for two licences to start commercial air services in Saudi Arabia, the kingdom announced last week.
According to the website of the Government Authority of Civil Aviation, the contenders include Al Washkan, operating as Sama airlines, National Air Services, and Al Tayar Travel Group, operating as Al Tayar Airlines. They are joined by Petrogal Co. under the name Al Watan Airlines, Al Mamlaka Holding, operating as Burj Airlines, and Saudi Ekhwan Brothers Commercial Co.
The government, which recently liberalised the aviation sector, plans to select two winners by the end of the year, according to an authority spokesperson.
The authority originally set a deadline of July 30 for proposals and later extended it to August 13.
The two airlines would join national carrier Saudi Arabian Airlines.
According to European aircraft maker Airbus, the Middle East aviation market is projected to experience the highest growth of any region, growing 10.7 per cent per year until 2013.
At least two firms, Sama and National Air Services, have announced their intention to run as low-cost carriers.
Sama, which has the backing of 30 Saudi institutional and private investors, has reportedly leased four narrow-body Boeing aircraft and signed a $121 million aircraft maintenance contract with Swiss firm SR Technics.
National Air Services runs a charter service and holds the Middle East franchise of Netjets, a private service based on fractional ownership, much like time-sharing for condominiums.
Expanding into offering commercial flights is a natural progression, according to company spokesperson Yasir Niazi.
"What the government wants to create is more choice," he said. "This is a strategic move for us."
Initially, the licences will permit only domestic services, the spokesperson said. "In the future, after two years or so, under some conditions they will be allowed to fly internationally."
Government Authority of Civil Aviation is a new body set up to guide the liberalisation of the aviation industry.
US management consultancy Booz Allen Hamilton has reportedly been retained to increase private sector investment.
Saudi Arabian Airlines is also privatising some of its operations and is in the process of divesting its catering, cargo and maintenance businesses.
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