AVIATIONS
NAD is created to be a Saudi company for Project development. NAD will become an enabler of the multiple sectors growth acting as catalysts of our nation’s economic expansion.
- GACA has announced its intention to privatize airports under its management and several supporting services and businesses, thus paving the way for private players to enter the airport development and operations sector.
- Banan Aloula and Nesma Holding have mutually agreed to jointly form a company National Airports Development Company (“NAD”) that will be the main vehicle to take the lead in GACA’s airport development projects.
Growing Market
Increasing inbound and outbound demand driven by a positive macroeconomic environment.
Steady liberalization of the aviation sector, an entrance of new airlines and promotion of competition.
Plan to unbundle the potential of tourism and pilgrimage as economic drivers.
Strategic alignment with the country’s Vision
Supporting the privatization of public-held services.
Promoting a transparent, business-driven environment.
Building local capabilities in a key sector of the national economy.
Driving social & environmental sustainability.
Room for operational enhancement
Decentralized cost monitoring system, generating local efficiencies and savings.
Challenges to keep pace with the technological evolution.
Improving passenger experience through process optimization and streamlining.
Mature regulatory framework for PPP
The legal framework in place to allow for private sector participation in the airport business.
Previous experiences in airlines and airports’ PPP successfully accomplished.
Moderate regulatory risk exposure for international partners. Appetite in the global airport business sector.
Potential Partnerships
NAD can associate with right partners to pursue strategic initiatives in the airports business in KSA
In addition to the operational services, it can provide ground support and services through strategic alliances . and international operators, thus creating National Airports Operator (NAO) to target large airport development.
It can also provide consultancy services for the aviation industry through its association with international airport operators and aviation consultancy firms.
NAD can provide F&M airport services through a partnership with reputable companies for operation and maintenance.
NAD can be also a player in hospitality and catering services dedicated to the aviation industry.
Nesma Holding and Banan Aloula have jointly shared a proactive vision to be the leaders in the ongoing change in the aviation sector with an enhanced role for the national players.
They have formed a dedicated development platform under the banner “NAD” with an objective to build national capacity for sustainable airport development and capture the international experience and knowledge into the local content.
NAD will be the main development vehicle for NESMA and BAI into Airport business, and one of its strategic initiatives is the establishment of National Airports Operator (NAO) In alliance with major local players.
NAD will act as a driving vehicle enabling the aviation sector growth in Saudi Arabia by taking lead in General Authority of Civil Aviation’s (GACA) airport development projects such as airports PPP, national airports operations in a strategic alliance with a Ground Service provider, development of low-cost carrier terminals, handling cargo airports operations and logistics, etc.
BackGround
Based on solid facts
- The global aviation sector is growing faster than the worldwide economy led by economic development in emerging countries in the Middle East and the Asia Pacific region, increased tourism demand and adoption of the low-cost business model across the globe.
The rapid development of the aviation sector in Saudi Arabia and the ongoing market liberalization driven by Vision 2030 program have created a challenging task for the existing setups and a unique opportunity for private sector players.
Aviation Sector Growth & Key Drivers
Air traffic evolution in KSA (2006 – 2015)
The increase of propensity to fly due to the growth of income backed up by population and GDP growths
Ambitious investment planned in airport expansion and modernization with private sector engagement (PPP) long-haul connectivity
Religious tourism in the Makkah-Madinah corridor supported by increasing long-haul connectivity
More Air Service Agreements signed and an entrance of international Low-Cost Carriers (LCC), increasing competition in domestic and regional markets
Saudi airport network will be under tremendous pressure in the coming years to cope with the growing demand, thus creating a huge potential opportunity for a strategic national operator entity
