Saudi Arabia has been rewriting the rulebook when it comes to airlines recently. As the Kingdom of Saudi Arabia has been working to privatize its national flag carrier, Saudi Arabian Airlines, the government has been seeking to create a more competitive airline landscape. Recently, after months of deliberation, The Kingdom opened up opportunities for foreign Gulf Region airlines to establish domestic route networks within Saudi Arabia, a stunning move, especially for such an insular nation.
Now, as Saudi Arabia determines its future airline needs and Saudi Arabian Airlines continues to expand its fleet, and work internally towards joining Sky Team, the landscape for the airline industry and the national flag carrier changes once again … the Saudi General Authority of Civil Aviation has announced it is opening up a competition for a license to establish a new national flag carrier airline.
The new national flag carrier competition is for an airline to operate both domestic and international flights. This competition directly impacts Saudi Arabian Airlines, which flies domestic and international routes, and NAS Air, which flies domestic and regional routes.
It is unclear whether or not bidding is open to domestic or international competition, but this new announcement is clearly a shot across the bow of Saudi Arabian Airlines on the cusp of the airline achieving governmental independence.
Can two national flag carriers survive in Saudi Arabia? Will the new airline receive similar subsidies to Saudi Arabian Airlines? Will the new airline be constrained by price caps and the political will of the Shura Council? At this time no one seems to know … but watching to see what happens should be interesting.