SAUDI ARABIA. Saudi private carrier National Air Services (NAS) said last week that it would launch the kingdom’s first low-cost airline. It is also preparing for an initial public offering (IPO).
“We are now in the process of converting from a limited liability company to a joint stock company in preparation for an IPO after two years,” said NAS Chief Executive Mohamed Al Zeer.
He said NAS was negotiating with European plane maker Airbus to buy four A320s as a starting fleet. The yet to be named airline will have a start-up capital of US$200 million.
“We will start with four aircraft and grow to 16 aircraft in five years. We are looking at four A320s with Airbus, and we are finalising talks,” Al Zeer said.
“The Saudi market has the highest potential regionally in terms of affluence, a large population and frequent visitors to religious sites that are sacred to all Muslims,” he said.
NAS is also setting up a US$100 million luxury airline, Al Khayala, to fly between the capital Riyadh and the Red Sea city of Jeddah.
It has already signed a US$250 million contract to buy five Airbus A318 Elite planes and is set to take an option for a further five.
The announcement follows soon after the launch of Kuwait’s first low-cost airline, Jazeera Airways. Jazeera is operating flights to Dubai, Lebanon, Damascus, Alexandria, Amman, Luxor, Sharjah, Beirut and Bahrain. It plans to extend its operations to Egypt, India and South East Asia in the near future.
The success of existing no-frills airlines such as Sharjah-based Air Arabia seems certain to encourage more similar start-ups.
