Saudi Arabia to cut airport charges by up to 35%

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Saudi Arabia announced this week it is reducing its airport charges for airlines by up to 35 percent, as part of its $100 billion investment strategy to boost its capacity to 330 million passengers per year by the end of the decade.

The reductions will apply to Riyadh, Jeddah and Dammam airports and will range from 10 to 35 percent, the kingdom’s General Authority of Civil Aviation (GACA) announced at the Farnborough International Airshow in the UK this week.

The move is part of the Saudi government’s plans to invest $100 billion in the aviation sector and boost the number of cities flying to and from the kingdom to 250 by 2030.

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“GACA’s reduction in airport charge caps and pricing flexibility policies are creating a more competitive and empowered aviation sector,” Mohammed Alkhuraisi, vice president of strategy and business intelligence at the GACA, told reporters this week.

“We are committed to reducing costs in Saudi Arabia’s aviation sector to ensure long-term competitiveness and growth, all at a time when global aviation is facing pressures in recovering from the pandemic.”

Saudi Arabia is also investing in developing its air cargo sector.

Air freight is measured in metric tons times kilometres (ton-kms) travelled and according to the World Bank.

According to data from the International Civil Aviation Organisation, Saudi Arabia processed 826.83 million ton-kms in 2015,  rising to 2.043 billion ton-kms in 2019, before the impact of the pandemic saw volumes fall to 649.33 million ton-kms in 2020.

In a bid to rebound freight levels, the GACA also announced at Farnborough it is planning to undertake a global roadshow over the next 12 to 18 months to encourage international operators such as Amazon, DHL and Alibaba Group to expand their cargo and distribution operations at Saudi airports, Bloomberg reported.