Jeddah, Asharq Al-Awsat—The Saudi aviation market has been making the rounds in the media recently. A large country with a domestic market catering for 25–30 million passengers a year, Saudi Arabia enjoys rising incomes and a corresponding rise in air travel demand. The government decided to deregulate the market in 2012, opening the way to grant licenses for new airlines. After years of having only one domestic airliner, national carrier Saudia, there are now two carriers operating domestically—Saudia and budget airliner Flynas—with two more slated to enter the market later in the year.
Saudia itself has also had an eventful period. The carrier now plans to list its cargo unit, Saudia Cargo, later this year, following its catering subsidiary as the second of six strategic business units it will privatize. Last month the airliner secured a 7 billion Saudi Riyal (1.9 billion US dollar) loan from a consortium of banks to fund growth plans and the delivery of 17 of 90 aircraft it has already ordered from both Boeing and Airbus.
Asharq Al-Awsat spoke with Saudia general manager Abdulaziz Al-Hazimi about the latest developments in the domestic market and the new competition the airliner now faces.
Asharq Al-Awsat: There is much talk about the privatization of Saudia. Have there been any practical steps taken in this regard?
Abdulaziz Al-Hazimi: Saudia is devoting all of its energy to preparing for this stage. The disaggregation and privatization of its sub-sectors has had a positive impact, which has reflected on its overall performance. In turn, the air carrier company will also aid in our preparations for future privatization. Saudia is closely examining privatization so as to help it avoid setbacks. In doing so, we hope that the privatization process can be a comprehensive success.
Q: Saudia has introduced a number of new destinations, although there was quite a delay in opening these new routes. Why?
I think that the growth in demand for [air] travel is very encouraging. Studies indicate that the aviation market in the Middle East is growing at a rate of 8 percent per year, and this figure stands to increase if the political situation improves. Saudia has not been slow in introducing new destinations. However, this step was concomitant with updating its fleet, which greatly helped in implementing its work plan. Moreover it contributed to the acquisition of a healthy share of the global transport market. Travel between Saudi Arabia and the United States stands at more than 300,000 passengers per year. The Los Angeles Airport (LAX) is the third addition, and we are studying adding a fourth destination in cooperation with Saudia’s partners in SkyTeam.
Q: What about your new aircraft?
Saudia has fully updated its fleet in accordance with the requirements of the new strategic framework. It has disposed of its old aircraft. To date we have received a number of Airbus planes and Boeing 777s. This is part of the 2007 development plan, and includes the purchase of about 90 modern aircraft. Of these, 64 aircraft have been delivered so far, and the remainder will soon arrive.
Q: You are also preparing to receive your first Boeing 787 Dreamliner aircraft. Will the discovery of the technical flaw afflicting this aircraft’s batteries affect this purchase?
Saudia is scheduled to receive its first Dreamliner plane at the end of next year. We take this matter very seriously. After the announcement of the technical problem with the batteries, Saudia decided it will not accept any aircraft until we have been officially assured by Boeing that the problem has been resolved. According to our understanding, Boeing has worked to find solutions to the overheating problem affecting the batteries, which is of great concern considering some international airlines are currently using this type of aircraft. Saudia’s technical team is closely following what is going on. We cannot be slack with regard to safety. It is the primary and constant goal of the organization.
Q: Saudia has faced criticism from some of its customers. Why do you think this is?
We welcome feedback that helps us identify our mistakes so that we may avoid them in the future, but we reject criticism just for the sake of criticism. Sometimes there is no evidence that unsatisfactory service was provided. Overall, Saudia has been criticized for its domestic flights because it is the only airline that flies to all airports within Saudi Arabia. With no alternative, these customers cannot distinguish between what Saudia offers and what other companies do. It is quite the contrary with respect to international travel. Saudia provides competitive services to customers and has seen noticeable increases in sales.
Q: What do you make of the entry of competitors into the domestic travel market? Are you worried what competition may bring?
We at Saudia search for ways to improve domestic transportation, as is our duty as the national carrier. Thus we believe that the entry of a new airline in domestic flights will boost competition and that this will be to the benefit of the domestic flyer. The domestic aviation market in Saudi Arabia is comprised of 2 million seats each year, which is room enough for the entry of competitors and we look forward to the entry of more companies into Saudi Arabia. Geographically, the country is as large as a continent, and there is a need for more than one carrier, which, once addressed, will increase reliability and the quality of service. We at Saudia look at this as a positive development. As of now, there is only one air carrier in Saudi Arabia, and travelers do not have another option with which to compare prices and services. We believe that competition will serve as an impetus to develop our services and continue to improve. We are certain that when the time comes, Saudia will be the best choice.
Q: Some complain that Saudia employees are unfriendly to customers. What are you going to do to improve customer service?
It is very important to us that Saudia employees base their interactions with customers on the teachings of Islam, which say that you should greet your brothers with a smiling face. We train our employees in customer service and satisfaction in a way that reflects our values. As for the presence of some staff who don’t provide the required level of service to customers, we handle these situations, and if necessary remove them from positions of direct interaction. We ask all passengers to provide us with feedback so that we can achieve our common goals.
Q: How do you envision the development of Saudi Arabian airports will progress? Will Saudia achieving its goals be to the customer’s benefit in the end?
Prince Fahd Bin Abdullah’s presence as chairman of the General Authority for Civil Aviation represents a quantum leap for the air transport industry in Saudi Arabia. This includes the development and construction of airports commensurate with the services provided at other airports. Traveler experience will improve across the board, especially in domestic airports, with regard to Saudia’s ground services and services related to passenger comfort. We have seen great progress [with the expansion] at the King Abdulaziz International Airport [in Jeddah], which will begin operating during the middle of next year according to local sources. This airport will play a pivotal role and will serve as an international hub. I believe that the completion of these projects, in addition to the project to develop the King Khaled International Airport in Riyadh, will greatly improve the quality of service found at Saudi airports.
This is an abridged version of an interview originally conducted in Arabic.