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Saudi Airlines boss criticises domestic price caps

Caps cost the airline money, says Khaled Al-Molhem.
Domestic fares can't be increased, but costs keep going up, says Saudia's director general.
Domestic fares can't be increased, but costs keep going up, says Saudia's director general.

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Khaled Al-Molhem, director general of Saudi Arabian Airlines (Saudia), has criticised price caps on domestic flights.

The caps, he said, cost Saudia money.

“There has been no change in domestic ticket fares for the last 16 years,” said Al-Molhem.

“Prices of everything have gone up and the salaries of our employees have increased. So we are suffering losses.”

The caps are believed to have played a key part in last year’s bankruptcy of Sama, a low cost carrier that competed with Saudia on domestic routes.

Nasair remains the national airline’s only competitor within Saudia Arabia, although it is increasingly focusing on the development of short haul international routes.

In a Q&A session at the Jeddah Economic Forum, the director general said he welcomed competition.

“We need more airlines to create competition and improve efficiency. Right now, people in the Kingdom are depending mainly on a single airline,” the director general said.

With price caps in place, however, it is hard to see Saudia facing increased domestic competition.

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