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Saudia to privatize four more businesses

January 2
7:39 AM 2014

A report by Arabian Business said Saudi Arabian Airlines is prepping to privatize some of its businesses as it intends to do a full sell off. The businesses of the state of Saudia Arabia, or Saudia, that were said to go private soon include Prince Sultan Aviation Academy and Saudia Private Airline. Arab News also disclosed in a report that Saudi Airlines Real Estate Development Company and the conglomerate's 400-bed hospital were also expected to be auctioned to private buyers this year.

Since launching its privatization efforts in 2001, Saudia has already privatized its catering, cargo, ground services and aerospace engineering units.

Saudia vice president for public relations Abdullah Al Ajhar was quoted in the report, who said, "This year will witness the privatization of about 70 to 80 percent of our strategic units." Al Ajhar also said that auctioning its businesses to private buyers had already increased the profits of the business units is has already privatized. He revealed that the profits of ground services, catering and cargo businesses each increased to around SR600million ($160 million) annually.

The report added that the largest business of Saudia, national airline Saudi Airlines, will be auctioned to private buyers last. Saudi Airlines carries around 22 million passengers annually. In preparation for the sale, the Saudi Arabian government had been upgrading its fleet, but the process will not be starting before the year 2015.

The country of Saudi Arabia, headed by King Abdullah bin Abdulaziz, is known to privatize industries like telecommunications and power in its efforts to boost private sector growth. Aside from its focus on the private sector, Saudia is also petroleum-dependent in terms of their economy. While a 2010 government study showed that the private sector contributed 40% of the country's nominal gross domestic product, the oil industry alone accounted 45% of Saudia's nominal GDP.

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