Saudia set to soar

Jaan Albrecht, CEO Saudia

Jaan Albrecht, CEO Saudia

The Saudi Arabian market is changing. Relatively closed for a long time, it’s beginning to open to increased competition. There’s evidence of dynamic new energy in the market. Unlike neighbouring States, Saudi Arabia has a substantial local population of 33m people; this underpins a large point to point market which is ripe for growth and supported by 27 airports in the country.

I spoke with new Saudia CEO, Jaan Albrecht, who’s been brought in to provide some “outside in” leadership based on his own substantial industry experience.

Saudia was established in 1945 and is now in its 73rd year. Until recently the airline has been in the shadow of the Gulf “Big Three” but is beginning to awaken, taking on its own profile and sense of purpose.

Last year Saudia carried a record 32m passengers and is a key part of Saudi Arabia’s “Vision 2030” initiative, to diversify the economy away from its reliance on oil.

The large home market provides a solid base of customers for Saudia. Added to this is the number of Saudi nationals living abroad, especially in Europe and the USA. This means there is much less dependence on transfer traffic than is seen in other Gulf markets.

“I would not like to overplay the sixth freedom opportunity, says Albrecht , it’s not the same business model that we pursue in Saudia”. He talks of the “unique positioning of Saudia “…with its strong positions for both Islamic tourism and for labour traffic, neither of which relies on sixth freedom traffic”.

Saudia operates two hubs, one in Jeddah, which supports the religious Hajj and Umra traffic visiting Mecca and a second in Riyadh, home of much Government traffic. The airline is poised to tap into a growing religious tourism market as millions of additional visas are issued for visits to Mecca. Hajj guests flying on Saudia were up 40% last year ahead of the visa expansion.

Fleet renewal is well underway with substantial orders coming through including more Boeing 777s and 787’s and additional Airbus A320’s. 32 new aircraft were delivered in 2017 alone and the fleet is expected to reach 200 aircraft by 2020.

The new Jeddah airport will open this year which will provide a much needed boost to currently very congested capacity and support Saudia’s growing activity.

There is a renewed focus on the customer too, Albrecht told me. “State of the art aircraft, investment in the fleet, in the on board service, investment in the overall experience for the customer will continue to be one of the priorities” according to Albrecht. “This is a proud company with 72 years of experience” he says. Saudia’s performance looks set to soar.

In my next blog I’ll look at the other big Saudi story, the growth of the LCC segment.

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