January 11, 2015 / 9:43 AM / in 3 years

Bureaucracy delaying Qatar Airways launch in Saudi: CEO quoted

DOHA (Reuters) - Complicated bureaucracy is delaying the launch of Qatar Airways’ domestic operations in Saudi Arabia, and they are now expected to start in six to 18 months, the airline’s chief executive was quoted as saying.

Akbar Al Baker CEO of Qatar Airways Group, smiles as he poses during the flight of the first delivery of the new Airbus passenger jet to Qatar Airways in Toulouse, southwestern France, December 22, 2014. REUTERS/Regis Duvignau

Saudi Arabia announced in 2012 that it would liberalise its domestic air travel market, where currently only national carrier Saudi Arabian Airlines and budget airline flynas serve a customer base of about 30 million people. Foreign carriers can only fly in and out of Saudi Arabia, not within the country.

The reform was seen as a major step by Riyadh to introduce more market forces into the economy. Qatar Airways obtained permission to run a Saudi domestic carrier, Al Maha Airways, and originally said it would start operating in early 2014.

But the plan was delayed, at least partly because of controversy over Saudi Arabia’s price caps for domestic flights and fuel subsidies for Saudi Arabian Airlines.

Qatar Airways said last January that Saudi officials had agreed to compromise on those issues and that operations would start by the third quarter of 2014, but it did not give details of the compromise, and the launch did not go ahead.

Last Thursday, Qatar Airways chief executive Akbar Al Baker was quoted by Saudi Arabia’s Al Madina newspaper as saying there would now be a further delay of six to 18 months because of “complex” bureaucracy. He did not elaborate.

Qatar Airways did not respond to a request for comment.

Diplomatic tensions between Saudi Arabia and Qatar last year seemed as if they might become an obstacle to the Qatar Airways venture. But the countries publicly patched up their differences at a summit of leaders last month.

Saudi Arabia’s Abdel Hadi al-Qahtani group also plans to launch a domestic carrier in the country and last year signed deals to buy planes, but it has not yet started operating.

Reporting by Amena Bakr; Editing by Andrew Torchia

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