GACA asks Aramco to cut aviation fuel price

JEDDAH: The General Authority of Civil Aviation (GACA) is trying to persuade Saudi Aramco to scale down its higher price for aviation fuel with the aim of creating an atmosphere of fair competition for airlines.
A reduced fuel price would also be beneficial for airlines that were selected for domestic services. The GACA also argues that aviation fuel is cheaper in neighboring countries.
“Aramco is charging airline companies prices higher than international prices, even in neighboring countries with lesser potential. For instance, Sudan is supplying fuel to all airline companies at a lower price than Aramco,” Vice President of GACA Faisal Al-Sugair said in a statement to Al-Eqtisadiah daily.
Higher fuel prices harm the Kingdom’s airlines in various ways. Airlines avoid fueling in Saudi airports to save money, thus resulting in losses to Saudi suppliers, he said.
Al-Sugair added that foreign aircraft that avoid fueling in the Kingdom land in Saudi with full fuel tanks, and the heavy planes in turn damage the tarmacs at Saudi airports.
“It is unreasonable that the world’s top oil producer demands a higher price than other countries with lesser oil resources,” he said.
Al-Sugair said he discussed with various related official departments to find out the reason why the price difference existed in the first place and how it could be brought down so that airlines in the domestic market had a chance at healthy competition.
Currently the state-owned Saudi Airlines and the low-cost Nasair are operating domestic services. Nasair with 16 aircraft operate to six domestic airports such as King Khaled International Airport in Riyadh, King Abdulaziz International Airport in Jeddah, King Fahd International Airport in Dammam, King Abdullah Airport in Jazan and the Abha Airport.
A third airline, Sama Airlines, ceased operation last year.
Bidding for licenses of airline companies for the Saudi domestic market is set to begin this month. It is expected that the names of the qualified companies will be published in October. This will be followed by checking the financial potential of the companies and the inspection of safety arrangements of aircraft, while the final green light for operations will be issued in the last quarter of 2013.
The consortia and companies that have been qualified for the right to present their offers to secure the Kingdom’s third air carrier license include Saudi-Gulf consortia and Saudi-Chinese consortia.