Saudi Gazette report

RIYADH — Saudi Arabia announced on Monday the economic policy for the Kingdom’s aviation sector that seeks to attract $100 billion investments by 2030. The General Authority of Civil Aviation (GACA) revealed that these investments, generated from the public and private sectors, would be utilized to raise the level of air traffic services in Saudi Arabia.

The GACA announced the adoption of three economic regulations for airports; ground handling services; and air cargo and air transport services, which will come into force on Oct. 30. The economic policy aims to boost the operation of the Kingdom’s airports and improve the performance of national air carriers, as part of the authority’s efforts to transform the Kingdom into a global hub for transportation and cargo services, according to a GACA statement.

This policy supports privatization of airports, facilitates the procedures for new investors to join the aviation sector in the Kingdom, and enables airport operators to set wages according to their plans. The GACA issued the economic regulations for ground handling and air cargo services, which stipulate adherence to the principle of ‘freedom of entry to the market’ by those wishing to provide the services in the Kingdom. It also issued economic regulations for air transport services, which aim to spur air traffic by facilitating the requirements for issuing economic licenses for air carriers, and canceling the economic requirements for non-commercial flights.

It also provides an infrastructure that stimulates competition and attracts foreign investment, in addition to achieving growth and enabling innovation in the aviation sector. These measures are in line with the National Aviation Strategy to enable it to be the number one sector in the Middle East, and to contribute to diversifying sources of income in Saudi Arabia

The economic policy and the set of regulations issued by the GACA will contribute to achieving the goals of the National Aviation Strategy and stimulate the investment environment by raising the contribution of the transportation and logistics sector to the GDP to 10 percent, in addition to creating direct and indirect jobs in the aviation sector, and pumping investments worth up to $100 billion from the public and private sectors by 2030. Moreover, it will create a competitive environment that provides equal opportunities for current operators and future investors so as to enhance the authority’s regulatory role in the aviation sector.

As part of strengthening its regulatory role in the sector, GACA issued the economic regulations for airports to develop the foundations regulating the work of operators. This supports privatization of airports, facilitates the procedures for new investors to join the aviation market in the Kingdom, and enables airport operators to set wages according to their plans.

The regulation also confirms adherence to the authority’s regulatory controls so as to enable airport operators to flexibly diversify their revenues by increasing revenues from non-navigational services, which in turn will motivate airports to diversify services and commercial activities keeping pace with the international standards and attractive to air traffic.

The GACA issued the economic regulations for ground handling services and air cargo services, which stipulate that everyone who wishes to provide services at the Kingdom’s airports must adhere to the principle of ‘freedom to enter the market,’ while setting standards and foundations that govern the airport’s selection mechanism for ground service providers to make available of a fair competitive environment.

The economic policy also contributes to facilitating the issuance of economic licenses for ground handling and air cargo service providers to attract investments, and enables transparency in transactions by activating consultations between various service providers, and clarifying the roles and responsibilities of each category of these service providers. In addition, the GACA issued economic regulations for air transport services, which aim to stimulate air traffic by facilitating the requirements for issuing economic licenses for air carriers, and canceling the economic requirements for non-commercial flights, which contribute to enhancing the scope of air connectivity to the Kingdom. The approved regulation also includes adoption of new special controls by distributing air traffic rights between national carriers on international routes with limited capacity to ensure equal opportunities.

It is noteworthy that the economic regulations were approved after collecting public opinions through a survey and putting them on a poll platform, and holding meetings and workshops with various stakeholders within the aviation sector. The GACA noted that the implementation of the provisions of the regulations will begin in a phased manner from the date of their implementation and over the coming 18 months, to ensure the sector’s readiness to apply these provisions efficiently