Saudi cabinet okays Saudi Arabian Airlines privatisation

The long-pending privatisation of Saudi Arabian Airlines received a shot in the arm on 27 August when the council of ministers gave the national carrier a go-ahead to convert its strategic units into companies.

"The council of ministers decided to allow the General Organisation for Saudi Arabian Airlines to transform strategic units in sectors targeted for privatisation into companies," the Saudi Press Agency said, quoting a cabinet statement.

Saudia will be licensed to establish companies wholly owned by the organisation, which can later be privatised with the participation of private investors. The employees of the new companies will get the same salaries and benefits they were receiving earlier.

The cabinet meeting was chaired by King Abdullah, and is expected to speed up the privatisation of the airline, the largest in West Asia with a fleet of 120 passenger and cargo planes. Saudia has already taken steps for the privatisation of its catering division.

According to the privatisation plan, the airline will be transformed into a holding company with subsidiaries running its catering division, air cargo division, ground service division, the Prince Sultan Aviation Academy, and technical and basic aviation services. Part of the holding company will be floated for public subscription in the future.