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16-Sep-2010

The Global Marketplace: Saudi Arabia

http://www.avinode.com/the-global-marketplace-saudi-arabia/

We are pleased to welcome you to our brand new ongoing series called “The Global Marketplace” Over the next several months we will be profiling powerful growth markets from around the world and viewing their impact on Avinode members and the global air charter market.

Throughout the series we will explore the impacts of globalization, and economic, political, institutional and industrial development on the Private Charter Market in various locations around the world.

In the first article of the series we will explore the Saudi Arabian market with a focus on the experiences of, Avinode member company, Saudia Private Aviation.

Saudi Arabia is likely the largest private charter market in the Middle East, but in contrast with many of its neighbors, Saudi has long struggled with the problem of grey charter.  With grey charter operators successfully undercutting the legitimate charter market it has been very hard to gauge the true value of that market until recently. This however, is about to change.

“Saudi Arabia is a very big and promising market,” says Faisal Al Saddik Managing Director of Saudia Private Aviation, the private charter division of Saudi Arabian Airlines, “With Saudi Arabia’s population of 27 million widely distributed between the major cities, aircraft have become an indispensable form of transportation.”

“It wouldn’t be an exaggeration to say that there are more aircraft in Saudi than the rest of the Middle East put together,” explains Ian Croxton, Avinode Regional Sales Manager for Asia. “With the political and economic capitals split between Jeddah and Riyadh the demand for private charter between these two cities alone is immense.”

Saudia Private Aviation is making a huge push to meet the growing demand for legitimate charter in the country.

“We are at the beginning of the process,” says Al Saddik, “we are working with the CAA to modify regulations in order to protect our passengers from illegal activity and we are already beginning to see improvements in the market.”

The tightening regulatory framework is likely to clean up the market considerably in the coming years, pushing the majority of the demand into the legitimate charter market. With their fleet of 8 brand new, state-of-the-art, aircraft and their hard-earned reputation for reasonable pricing, safety and luxury, Saudia is poised to meet the increased demand.

“The Saudi Arabian market is very different from in Europe where most private aviation is for business. In Saudi a lot of VIPs, royals and other people who can afford to fly private will tailor make their travel arrangements to suit their exact needs,” explains Al Saddik. “We pride ourselves on providing luxury service for the VIP, and this makes us very competitive.”