Contributor - Middle East

Peter Shaw-Smith

The Kingdom of Saudi Arabia has long been regarded as the jewel in the crown of the Gulf region’s business aviation market, albeit a jewel that has often seemed quite unobtainable due to an array of complex obstacles. As has happened in China, albeit in a different context, anti-corruption initiatives—epitomized by the 2017 arrests of prominent ultra-high-net-worth Saudis—have resulted in private aviation maintaining a distinctly low profile.
More recently, there have been signs of hope for companies waiting patiently for improved market access, with Saudi regulators seemingly following directives from the very highest echelons to be more open to outsiders. The Kingdom’s spate of high-profile investments in projects on its Red Sea coast and efforts to attract major sporting and cultural events appear to be fueling a renewed focus on the market.
These changes were openly discussed during a panel session at the MEBAA business aviation trade show held in Dubai in December. Industry leaders broadly welcomed improved prospects for exploiting opportunities in Saudi Arabia, with some caveats about how the country’s General Authority for Civil Aviation (GACA) is managing changes to the general and business aviation sector.
“Saudi Arabia is a large country—the size of mainland Europe,” said Khalid Alnatour, CEO of Aloula Aviation. “It needs a lot of connectivity. It is the world’s 17th-largest economy. That type of economy and the [inherent] growth in the next five years is, I think, half the job.”
GACA was revamped in 2021 under new president Abdulaziz Al-Duailej. Try as his team might, it was not until 2024 that a new general aviation plan was announced. Saudi Arabia’s primary aviation <a href="https://www.ainonline.com/aviation-news/air-transport/2023-11-13/saudi-arabias-airport-plans-challenge-regional-status-quo">focus</a> has always been commercial aviation, as the advent of Riyadh Air, the revamp of Saudia, and a 330-million-passenger target by 2030 make clear. It was not until 2011 that Saudi Arabia’s civilian aviation sector was <a href="https://www.ainonline.com/aviation-news/air-transport/2011-11-28/saudi-aviation-could-open-following-reorganization?amp=&amp;qt-latest_trending=1">removed</a> from defense ministry control.
<h2>Regulator Now Less Rigid</h2>
Nonetheless, the recent progress has been welcomed; GACA was long perceived as too rigid. For instance, it has only been since 2021 that the time needed to obtain an air operator certificate has been cut down to a reported six months.
In December, GACA announced a new directive approving annual permits for private aircraft owners that should reduce bureaucracy. The permits apply to domestic or international aircraft used for personal, non-commercial purposes, provided they meet the approved requirements.
Before the measure was introduced, private operators were obliged to obtain individual permits for each flight. The regulator said the initiative would complement existing individual flight permits, allowing private aircraft owners to travel to, from, and within the country more easily without needing a separate permit for each flight.
Although GACA’s Part 125 operator certificates—similar to FAA Part 91—prohibit revenue-earning flights on private aircraft, the reality is that the agency can find it difficult to be certain about the basis on which the flight is being operated. According to an industry source speaking with AIN on condition of anonymity, Part 125 operators illegally carrying passengers for hire often simply say the equivalent of “this is my friend” in cases where investigations are conducted.
Even though a workable roadmap for general aviation has been put forward, market participants are impatient to get moving. There are now plans to establish FBOs at a further nine general aviation terminals at existing airports, including those with international traffic. An example of this trend is the recent agreement for <a href="https://www.ainonline.com/aviation-news/business-aviation/2024-12-09/jetex-signs-first-saudi-fbo">Jetex to develop an FBO</a> at the new Red Sea International Airport on the west coast, evidence of international interest in supporting the needs of wealthy visitors to the emerging resort area.
<h2>Can the Saudis Attract Service Providers?</h2>
But Dubai’s success in developing FBOs and maintenance, repair, and overhaul (MRO) facilities could hinder Saudi Arabia’s development. Jet Aviation has spent tens of millions of dollars developing its facilities in Dubai, which begs the question as to whether the group and its rivals in the UAE will feel the need to invest in the neighboring Saudi market.
“What [GACA] needs to do is just to go to other [business aviation] organizations that we know. There are a few in Europe and the U.S. and you bring them in,” said an industry executive speaking with AIN on condition of anonymity. “We want MROs and FBOs; we want to have that support. If GACA were to present them with a reasonable business model, they will come.”
Nonetheless, from the industry’s perspective, some improvements have already been achieved in Saudi Arabia. For instance, since October 2023 there is no longer a requirement for local investors to have at least a 51% majority stake in business aviation companies.
Insiders differ on where and how additional FBO and MRO facilities will be added. Some say outsider locations, such as the new Al-Ula International Airport, will be first to test market interest before the big-ticket items come up on the block, while others believe sites like Riyadh are up next to get the market moving.
“Al-Ula is going to be low traffic,” the same source said. “No matter how much traffic you're going to have in Al-Ula, in Riyadh there will be more. Al-Ula is seasonal. If I want to invest 10, 20, 30, 50 million dollars in an airport, would I want to do it in Al-Ula or a bigger city? There’s a big difference.”
Development of the private aviation terminal at King Khalid International Airport in Riyadh peaked around five years ago. However, it is now expected to be <a href="https://www.ainonline.com/aviation-news/business-aviation/2024-12-02/saudi-arabia-moves-new-general-aviation-blueprint">demolished</a> to make way for a brand-new facility at the King Salman Airport to open in time to meet the 2030 target.
Meanwhile, GACA’s general manager for general aviation, Imtiyaz Manzary, is doing his best to keep everyone happy. With the World Expo coming to Saudi Arabia the year Vision 2030 culminates, there’s much to prepare for. Hot on the Expo’s heels will be the FIFA World Cup 2034.
—Charles Alcock contributed to this report

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