Dubai: Saudi Arabian Airlines Corporation, the holding company of Saudi Arabian Airlines, is planning an initial public offering of the state-owned carrier, the airline’s director-general Saleh Al Jasser said on Monday.
The listing is part of a five-year strategy to make the airline, also known as Saudia, profitable by 2020. But a decision on when to list the carrier or how much of a stake would be floated is yet to be determined, according to Al Jasser.
“The programme we are going through, the restructuring programme, will help... turn that company into profitability and ready for listing,” Al Jasser told reporters in Dubai at the Arabian Travel Market.
The listing could take place before profitability is realised, he said.
Saudi Arabia decided in 2006 to partially privatise six units of the national carrier. Saudia’s catering arm was the first with $347 million (Dh1.27 billion) raised in a 30 per cent stake sale in 2012.
Saudia has since listed a 30 per cent stake of its ground handling unit, though plans to list the cargo, maintenance and training units have so far not been followed through.
Al Jasser said the paperwork for a 30 per cent listing of the cargo unit is being finalised and that a stake sale could take place as early as next year.
Details of the listing of Saudia, the major asset of Saudi Arabian Airlines Corporation, came the same day Saudi Arabia announced its National Transformation Plan (NTP). The plan includes a series of economic reforms and a 5 per cent stake sale in state-owned energy giant Saudi Aramco.
Though Saudia’s restructuring started before the NTP, Al Jasser said management “updated” the strategy to match the government’s vision. He did not mention any specific updates to the strategy.
Southern hub
Meanwhile, Saudia is considering adding a hub in Abha in the country’s south to better connect the country of 30 million, according to Al Jasser. The airline is based in Jeddah in the country’s west.
Al Jasser did not say when a decision would be made on the second hub but did say the airline is also looking at introducing turbo-prop aircraft to the fleet to serve smaller airports.
Saudia’s restructuring plan includes increasing its fleet size to 200 aircraft and flying 45 million passengers a year by 2020, up from around 120 aircraft and almost 30 million passengers in 2015.
The airline aims to complete a 5 billion riyal (Dh4.89 billion) sukuk by mid-2016 to fund its fleet expansion, Al Jasser said. HSBC is the lead arranger on the financing, he said.
Last June, Saudia ordered 30 A320ceo’s (current engine option) and 20 A330-300 Regional’s worth $8.2 billion.
