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Saudi Gulf Airlines set to enter domestic market

Saudi Gulf Airlines is gearing up to enter into the Saudi domestic market in the winter of 2014. This will be the fourth domestic airline operating in the Kingdom after Saudi Arabian Airlines, flynas and Al Maha of Qatar Airways.
The Dammam-based Abdel Hadi Abdullah Al-Qahtani & Sons Group of Companies (Tariq A.H. Al-Qahtani & Bros.) recently announced the launch of Saudi Gulf Airlines following the approval of the General Authority of Civil Aviation (GACA) in Saudi Arabia for the carrier to operate regular domestic, regional and international flights pending the granting of an air carrier operating certificate to the wholly-owned Saudi company.
Saudi Gulf Airlines plans to operate three to four daily flights, beginning with the winter schedule of 2014 to Jeddah and Riyadh departing from Dammam airport.
In the second phase, the airline plans to increase flights and expand its domestic network to Madinah, Qassim, Abha and Tabuk, targeting to cover most of the domestic routes and expanding further to the international network covering the Near East, Middle East and Africa.
On Monday, Qatar Airways announced that it would launch domestic operations in Saudi Arabia in the first half of 2014 under the name of Al Maha Airways.
Commenting on the expansion of the Saudi domestic airline market, Basil Al-Ghalayini, CEO of BMG Financial Group, said: “Passenger demand for local flights outstrips the current supply. The pan-Kingdom flights market can absorb more players to fill in the gap in the local traveling market.”
He said that, “having two major regional airlines flying local routes will definitely ease the pressure on Saudia and flynas. We are still faced with the difficulty of securing bookings on Saudia flights at short notice, especially between the major cities, during holiday seasons. Furthermore, flynas is still considered to be unreliable for the business commuter.”
Al-Ghalayini added: “As someone who travels twice a week between Jeddah and Riyadh, I must say that the service and quality of seats on local Saudi flights are still mediocre, if not disappointing in some cases. I do hope the newcomers will make up for the shortcomings of prevalent airliners while at the same time creating healthy competition.”
Faisal Alsayrafi, president of the Financial Transaction House (FTH), told Arab News: “An ‘open skies’ policy is always a good policy. The entrance of new airlines into the domestic market will undoubtedly lead to healthy competition, which will benefit the end-user consumer.”
He said: “This is overdue. There has been a need for more airline operators for a long time. Due to heavy traveling demand in the domestic sector, the introduction of any new airlines will lead to better facilities and more convenience for passengers.”
However, Gulf Air, Bahrain’s national carrier, issued a statement on Tuesday in Manama clarifying the recent awarding of two licenses by GACA to operate domestic services within Saudi Arabia.
Gulf Air did not bid and has not been awarded domestic traffic rights to operate in Saudi Arabia. The airline’s involvement is limited to a consultative capacity to the Al-Qahtani Group, a consortium of privately owned companies based in Saudi Arabia.
Accordingly, Gulf Air’s name and brand remain independent of the venture.
An initial contract signed last year appointing Gulf Air in an advisory role to support the Al-Qahtani Group’s bid for national traffic rights in the Kingdom has concluded, with the consortium being awarded one of the two licenses. A second consulting agreement between Gulf Air and the Al-Qahtani Group is currently being negotiated, whereby Gulf Air will support the Al-Qahtani Group in obtaining its Saudi Arabian air operator’s certificate.
Gulf Air has been operating to Saudi Arabia for over 63 years, amassing extensive operational and logistical knowledge of the Kingdom. As such, the national carrier is in a position to support Al-Qahtani in obtaining its air operator’s certificate and further facilitate its entrance into the market.