Arab News, Sat, Nov 18, 2023 | Jumada Al-Uola 4, 1445
New policy seeks to propel Saudi aviation sector to new heights by 2030
Saudi Arabia:
Saudi Arabia aims to emerge as a leader in the regional aviation sector within
10 years and to achieve this ambitious goal it has introduced a raft of measures
to ensure an environment for sustainable growth and investments.
The latest in a series of those measures is the
introduction of a new aviation policy that redefines the role of the General
Authority for Civil Aviation allowing it to increase its focus on enhancing the
competitiveness of the Saudi aviation sector.
Commenting on the Saudi Aviation Strategy, a GACA
spokesperson Ibtisam Al-Shehri told Arab News: “We are committed to achieving
our goals under the Saudi Aviation Strategy and ensuring the aviation sector
plays its role in the transformation of the Kingdom under Vision 2030.”
He said all stakeholders, particularly GACA, were
highly motivated to ensure the successful implementation of these reforms and
“see Saudi Arabia’s aviation sector lead the region by 2030.”
The International Air Transport Association also
welcomed the aviation authority’s proactive approach to engaging with industry
stakeholders to help shape and upgrade new aviation regulations.
During the Arab Air Carriers Organization annual
general meeting in Riyadh, IATA Director General Willie Walsh said: “(Air)
traffic in the Middle East grew by 26.1 percent compared to the previous year.
For cargo, data shows that the region is already over 2 percent up on 2019
levels.”
The recently announced aviation strategy seeks to attract $100 billion worth of
investments by 2030. In a statement, GACA emphasized that these pivotal reforms
are aimed at bolstering competitiveness, enhancing transparency, and bringing to
fruition the objectives outlined in the Saudi Aviation Strategy.
It emphasized that the policy framework is set to
create fresh opportunities for investors and operators by leveling the playing
field to stimulate increased competition.
The policy overhaul will encompass regulations
governing airports, ground services, air cargo, and air transport services.
Airport rules
According to GACA’s media briefing, the airport
regulations will cover matters related to ownership, earnings, quality of
service, and investments.
The authority will recategorize airports into
three main groups based on their size and capacity: major airports, which handle
over 10 million passengers or more than 125,000 tons of freight; mid-sized
airports, serving between 3 and 10 million passengers or handling 25,000 to
125,000 tons of freight; and small-scale airports, accommodating less than 3
million passengers or handling under 25,000 tons of freight.
Freight refers to goods being transported in large
quantities from one place to another, often by various modes of transportation
including airplanes.
Furthermore, GACA’s policy specifies who can own
and control airports. As per the new plan, the Saudi government or
government-owned entities can own the land and airport facilities, but foreign
investors can now also serve as airport operators without any restrictions.
Managing airports
Under the new plan, GACA will assume the role of a
regulator that will only step in if and when needed. Decisions will be finalized
in this regard following thorough consultation with airport user groups. The
contours of the new policies will take shape after a careful review of the input
from different stakeholders.
Al-Shehri said: “We have consulted with airlines
on our reforms to ensure that the regulatory environment we are putting in place
enables airlines to grow, innovate, and provide the best possible service to
passengers.”
Ground services and cargo
The new rules regarding ground services, including
baggage handling, freight, and mail handling, aim to establish a competitive
sector with enhanced productivity and service quality, along with regulations on
pricing and quality.
GACA also reportedly took measures to curb
malpractices and eliminate the risk of any kind of manipulation while deciding
which ground and ancillary services should be economically regulated.
Reforms concerning stakeholders and service
providers involve defining the roles and responsibilities of each party,
reducing government involvement with investors, and streamlining interactions
with clear areas of responsibility.
The new policy also introduces standards to ensure
global service quality, and commitments to key performance indicators, clarifies
the airport’s role, and outlines escalation mechanisms for service providers and
users.
GACA President Abdulaziz Al-Duailej emphasized the
alignment of these changes with global practices and their potential impact.
He said: “GACA’s transformation of Saudi Arabia’s
aviation economic regulations will drive further investment, growth, and
performance across the aviation sector.
“The regulations will enable the realization of
the Saudi Aviation Strategy, which is mobilizing $100 billion in investment from
public and private sector sources by 2030. These changes will create more
competition, choice, and value for passengers and consumers.”
Air transport
Regulations for air transport have been
streamlined to align with global best practices, according to GACA.
The reforms for national carriers include the
approval of airline marketing agreements, a process for allocating international
traffic rights on constrained routes, and criteria for wet-lease approval and
renewal.
Wet leasing, defined by EU regulations, involves
operating an aircraft under the lessor’s Air Operator Certificate.
Scheduled foreign carriers will benefit from
streamlined local office requirements and the removal of bond requirements,
while general-purpose charters will no longer require economic approval for
series charters and will see the removal of local office and bond requirements.
General aviation operators will enjoy more
flexibility as restrictions on “empty leg” flights are eliminated, improving
international flight network connectivity.
An empty leg flight occurs when a chartered jet,
initially flown to a specific location without passengers, returns without any
booked passengers to its home base.
Al-Shehri said: “The totality of these measures
has the effect of optimizing costs for operators and investors while improving
transparency in commercial transactions and providing the flexibility for market
participants to innovate.”
She told Arab News: “Over the coming months, we
want to highlight the contribution and importance of the sector to the Kingdom,
celebrate key milestones in the sector’s progress under the Saudi Aviation
Strategy, as well as celebrate the talent and people that are driving this
transformation across the sector.”
What is in it for passengers?
The new aviation policy aligns with GACA’s
recently approved passenger protection guidelines, set to take effect on Nov.
20.
The new rules will focus on supporting passengers
in cases of delayed or canceled flights, reservation issues, or changing the
ticket class. Some refunds may reach up to 150-200 percent of the ticket fare.
The guidelines also address the rights of
passengers with special needs, along with ensuring compensation of SR6,568
($1,751) in case of lost luggage and up to SR6,568 in case of damaged luggage.
In this context, Al-Shehri told Arab News: “The
enhanced competitive environment will attract new investment and market
participants, thereby providing a wider range of choices for passengers and
improving the quality of service experienced at airports and airlines.”
“These new economic regulations follow GACA’s
enhancement of passenger rights regulations earlier this year, which introduced
the most comprehensive protections in the region,” she added.
Earlier this year, Saudi national airlines issued
refunds totaling SR58 million to passengers during 2021-22. GACA clarified that
these refunds primarily addressed issues such as delays or loss of luggage,
flight cancellations, and delays.
Sustainability factor
Recently, Saudi Arabian Oil Co. successfully
converted used cooking oil into certified sustainable aviation fuel through one
of its joint ventures.
In a statement, Saudi Aramco Total Refining and
Petrochemical Co. announced it had used the foodstuff as a renewable feedstock
in its low-pressure hydrodesulfurization unit, resulting in the production of
certified sustainable aviation fuel.
SAF is a liquid fuel that reduces carbon dioxide
emissions by up to 80 percent, according to IATA.