Saudi Arabia Civil Aviation Unveils New Economic Policy
The General Authority of Civil Aviation announced a new economic policy for Saudi Arabia’s civil aviation sector, effective from October 30, 2023. Along with the policy, three economic regulations were released for airports, ground services, and air cargo and transport services.
Goals of New Policy
This policy aims to enhance operational performance at Saudi airports and improve national airlines’ performance. It also aligns Saudi Arabia as a global hub for transport and shipping services by fostering competitive infrastructure and attracting foreign investment. The policy stimulates growth and enables innovation in thecivil aviation sector.
Economic Impact and Job Creation
The economic policy and regulations will help achieve the national aviation strategy’s objectives. They promote an investment-friendly environment in Saudi Arabia. They aim to increase the transport and logistics sector’s contribution to the Gross Domestic Product to 10%. This initiative will create direct and indirect job opportunities in the aviation sector. It will inject investments worth up to 100 billion dollars from both public and private sectors by 2030.
Strengthening Regulatory Role
To strengthen the regulatory role in the civil aviation sector, the authority issued an economic regulation for airports. This regulation supports privatization and facilitates new investors’ entry into the aviation market. It enables airport operators to set charges based on their plans. It emphasizes compliance with regulatory controls to allow revenue diversification through increased non-aeronautical service revenues.
Regulations for Ground Handling and Air Cargo Services
The authority issued economic regulations for ground handling and air cargo services. These regulations mandate adherence to the “market entry freedom” principle for anyone wishing to provide services at Saudi airports. They set standards to ensure a fair competitive environment and facilitate economic licenses issuance for service providers.
Boosting Air Transport Services
An economic regulation for air transport services was issued to stimulate air traffic. It eases the requirements for issuing economic licenses for airlines. It abolishes economic requirements for non-commercial flights, enhancing the Kingdom’s air connectivity scope.
Public Engagement and Gradual Implementation
The economic regulations were adopted after seeking public opinions and engaging with various stakeholders within the aviation sector. The gradual implementation of the regulations will start from their effective date over the next 18 months to ensure the sector’s readiness for efficient implementation.
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