National Air Services (NAS) is poised to attempt a major breakout in the Saudi Arabian air travel market, having launched a VIP shuttle service and announced the creation of the country’s first no-frills airline.

NAS Airbus

The new service – named Al Khayala – will target VIP travellers on the Riyadh to Jeddah corridor, which sees demand from 15,000 business-class travellers a month, says Mohammed H Al Zeer, NAS president and chief executive. NAS unveiled five firm orders during the show for Airbus A318 Elites, plus five options.

NAS also revealed plans to launch a no-frills airline for the Saudi market in the second quarter of next year. Starting with up to four A320s, NAS plans to open low-cost services to three cities – Damman, Jeddah and Riyadh.

After five years, NAS plans to have up to 16 A320s in operation, serving most of Saudi Arabia’s 26 major airports. Terms of the initial order for A320s are being negotiated with Airbus, says Al Zeer.

The Jeddah-based company is dramatically expanding from its 1999 beginning as a luxury charter operator and regional NetJets affiliate. Earlier this year, it became the first non-state-owned airline to receive Part 121 certification from the Riyadh government.

NAS is projecting dramatic growth despite struggling to gain access to affordable aircraft financing packages, says Al Zeer. “NAS can’t go to traditional aircraft financing sources to finance private aircraft.”

Al Zeer blames the 9/11 terrorist attacks for making Western banks more reluctant to grant loans to a Jeddah-based airline employing Saudi pilots.

NAS has had to seek creative alternatives, such as gaining the backing of European and US export credit agencies, which guarantees the loans for lending institutions. This alternative financing approach could become increasingly popular among the region’s growing number of start-up, independent airline operators.

Source: Flight International