Qatar Airways mulls creation of Saudi Arabian subsidiary

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A Saudi Arabian subsidiary of Qatar Airways could be created after the carrier's chief executive, Akbar Al Baker, held talks with a member of the kingdom's ruling royal family to discuss the opportunities created by the liberalisation of its aviation sector.

In January, Saudi Arabia's civil aviation authority, GACA, invited airlines and investors to submit bids to operate domestic and international services from its airports. The aim was to "create a wider competitive environment" and "provide more travel options for the public" within the country.

Al Baker says that Saudi Arabia's under-served market represents a key growth area, and as such Qatar is keen to invest. But he adds that this is dependent on a fundamental re-think by the government of certain factors.

The challenges Al Baker notes include above-average fuel charges in the kingdom plus the government's policy of controlling domestic ticket prices through a fare cap, which he says stops airlines operating commercially. Al Baker links the fare cap to the demise of domestic carrier Sama Airlines, which ceased operations in 2010.