Saudia awaits new authority

THE establishment of an independent civil aviation authority by Saudi King Abdullah is likely to oversee the eventual privatisation of Saudi Arabian Airlines.

The government has been trying to privatise the airline for five years. It launched the process in 2006 by dividing up the company into six units – catering, cargo, maintenance, airlines, flight academy and ground handling – with a view to sell each separately.

Saudi Airlines Cargo was one of the first to be privatised, with 30 per cent now owned by Tarabut Air Freight Service.

The ground handling services unit was merged last year with National Handling Services and Attar Travel Company.

The maintenance unit will start making arrangements to sell a stake later in 2011, officials have said.

The airline announced earlier this year plans to hold a much-delayed initial public offer of its catering unit estimated to be worth up to US$540 million by end of 2011.

Saudia has undergone a restructuring programme in anticipation of selling.

The decision to separate civil aviation from the Ministry of Defence and Aviation followed the death of Crown Prince Sultan, who was also in charge of the ministry.

All duties and responsibilities of civil aviation will be transferred from the Defence Ministry to the General Authority for Civil Aviation, which comes directly under the king in his capacity as prime minister.

King Abdullah named Prince Fahd bin Abdullah bin Mohammed al-Saud head of the new aviation body.

The king also ordered restructuring of the board of Saudi Arabian Airlines but names of the new board are not yet known.