The General Authority of Civil Aviation (GACA) has announced its new economic framework to drive $100bn investment in Saudi Arabia’s aviation sector.
The framework will boost competition, create open markets for growth and innovation and increase transparency in commercial relationships and pricing. This will deliver better resource allocation, investment, and financial sustainability across the sector, according to GACA.
“GACA’s transformation of Saudi Arabia’s aviation economic regulations will drive further investment, growth, and performance across the aviation sector,” explained GACA President His Excellency Abdulaziz Al-Duailej. “The regulations will enable the realization of the Saudi Aviation Strategy, which is mobilizing $100bn in investment from public and private sector sources by 2030.
“The regulations create an open, dynamic and competitive market, setting a level playing field for global operators and investors in the Kingdom. These changes will create more competition, choice and value for passengers and consumers.”
Industry reforms
Among the reforms, qualifying rules for airport operators have been expanded to support the privatization of the Kingdom’s airports alongside streamlining processes for new entrants to conduct business.
Airports will be able to propose charges in line with GACA’s policy frameworks, and will have more flexibility to diversify revenues by growing non-aeronautical revenues. Airport performance will also see a significant overhaul, with airport quality targets linked to a new incentive scheme.
Ground handling services and air cargo will be opened to competition, with a ‘general freedom of access’ principle being supported by competition levels across the Kingdom’s airports. License processes for ground handling and air cargo service providers is also streamlined.
Foreign carriers will benefit from streamlining the processes including removal of economic license requirement for charter flights, reducing the cost of doing business. General aviation operators will benefit from the removal of ‘empty-leg’ restrictions, giving more flexibility when operating international flights to enhance network connectivity. A new certificate will also be introduced to allocate international traffic rights on constrained routes for national carriers to ensure equal opportunities.
The regulations were developed and approved following an extensive consultation process with aviation sector stakeholders, with some provisions being phased over 18 months. The regulations will be supported by an implementation plan communicated by GACA to sector operators.
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