AIR TRANSPORT
SaudiGulf Airlines chief executive,
Abdulmohsen Jonaid, tells Martin Rivers
that the boutique carrier is laying the
foundations for a bigger, brighter future.
Jonaid’s private
thoughts...
ith just six aircraft in its fleet,
W SaudiGulf Airlines, a boutique carrier
based in Dammam in eastern Saudi
Arabia, has only a modest slice of the kingdom’s
fast-expanding aviation market.
Owners, Al-Qahtani Group, a family-run
conglomerate, undoubtedly hoped to spread
their wings faster when they were granted an
operating licence in 2016.
But, for chief executive, Abdulmohsen Jonaid,
who joined the airline after heading up Saudia,
the country’s much larger flag-carrier, quality is
more important than quantity at this stage of
SaudiGulf’s development.
“There is a small statement that we use in the
company,” he said. “What we’ve been doing for
the past three years is putting down a very strong
foundation. Our statement is that we can use this
foundation to build a skyscraper.
“If the stakeholders want to bring 100 aircraft
now, we can take that – at any moment – because
we have the systems in place. We can take the
challenge, we can see it through, and we can
operate safely and in a very efficient and
optimised fashion.”
Tough market conditions
Jonaid’s confidence echoes that of his predecessor,
Samer Majali, who told Arabian Aerospace in
2017 that Al-Qahtani Group’s investment could
support an “operation several times the size of
what it is today”. However, tough market
conditions have not helped either chief executive
make the most of those capabilities.
The airline’s current network centres on a
primary hub in Dammam, with spokes extending
to four domestic cities (Abha, Jeddah, Medina
and Riyadh), plus four points in Pakistan
(Islamabad, Karachi, Lahore and Sialkot).
Scheduled flights are also operated from
Riyadh to Jeddah; Amman in Jordan; and Dubai
in the UAE.
Oversupply is the main stumbling block to
growth, with two other new airlines – Flyadeal, a
low-cost subsidiary of Saudia; and Nesma
Airlines, a regional carrier based in the north –
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entering the market around the same time as
SaudiGulf.
Alongside fleet expansion by both the flag-
carrier and Flynas, the country’s second largest
airline, this glut in capacity has hit profitability
across the sector.
“Our five-year business plan was put together
at a time when the assumptions were significantly
different,” Jonaid admitted. “So, what we’re
doing is we’re revisiting our business plan, going
more towards a transformation plan. And I think
the time is right. We have three solid years of
understanding and data and knowledge to
revamp our business plan.
“Three years as a private company, with no
subsidies, has given us a lot of insight – real insight –
into behaviour, into the way things have changed.”
Jonaid tacitly acknowledged that the airline is
loss-making at an operational level but said Al-
Qahtani Group is “determined to make sure it
stays alive and prospers”.
Asked how to achieve that, he added: “It can’t
be anything except growth. If you don’t grow, you
get eaten alive.”
Expansion will get under way this year with the
delivery of three brand new A320neos in
February, March and June – all drawn from the
order-books of supplying lessors. Management
are also working to source another three A320s
or A321s on the secondary market.
That could, potentially, lift the narrow-body
fleet to 12 aircraft, though it is likely that two
wet-leased units currently deployed on the
Pakistani routes will be withdrawn.
Jonaid did not outline delivery targets for 2021
or 2022, but the company has previously said it
aims to grow “at the rate of six to eight aircraft
annually”.
Any older units sourced in the near future will
likely start being phased out in 2023, when a
direct order with Airbus for 10 A320neos comes
on-stream. The commitment includes options for
another 10 units, plus the ability to convert to
A321neos.
Although board member, Abdalmalik Al-
Qahtani, has set his sights on a fleet of 70 aircraft
by 2026, Jonaid restricted himself to a shorter-
term forecast of 20.
That would mean SaudiGulf remains a
minnow in the local aviation sector: at the time of
writing, Saudia had 147 passenger aircraft in
service plus firm orders for 65 more; Flynas
operated a 32-strong fleet with 71 firm orders;
and Flyadeal deployed 14 aircraft with plans to
take 30 units from Saudia’s backlog.
Small size is not necessarily a problem for
SaudiGulf, given its positioning as a boutique
carrier. It consistently achieves the highest
customer satisfaction rating of any airline in the
kingdom, distinguishing its service with leather
seats, in-flight entertainment (IFE) systems and
complimentary hot meals.
However, with market-wide pressure on yields
showing no sign of abating, Jonaid is looking for
ways to balance this high-end service with better
economics.
Economy-only layout
Customers will notice one compromise when the
A320neos arrive in Dammam this year: all three
units have been configured in an economy-only
layout. That contrasts with the airline’s existing four
owned A320s, which feature a “BusinessFirst”
cabin with 16 seats.
“We’re not abandoning the full-service model
that we have,” Jonaid stressed, pointing to the
IFE systems and generous seat pitches on the new
aircraft.
“We will be adjusting. We are repositioning.
We know that we have managed to identify
routes that will sustain this boutique product,
and around that we’re building for, let’s say, not
‘low-cost’ but ‘smart boutique’.”
As well as refining its cabin configurations,
SaudiGulf is paying close attention to the
government’s Vision 2030 plan – a
macroeconomic initiative that aims to reduce
Saudi Arabia’s dependence on oil in favour of
developing other public service sectors.
Religious tourism is a cornerstone of the plan,
with officials aiming to attract 30 million Umrah
pilgrims from abroad by 2030 – triple the

number that visited during the last season.
“The opportunities that Vision 2030 is actually
bringing can take away a lot of the negatives,”
Jonaid predicted. “The government has done its
part. This vision has put things in perspective. And
now it’s really for the investors, the entrepreneurs
to actually move forward and take advantage.”
Encouraged by the liberalisation of the Umrah
visa regime, SaudiGulf will be playing its part in
bringing more pilgrims to the kingdom.
The airline is preparing to add narrow-body
charter flights from Medina and Jeddah (near
Mecca) to the Iraqi cities of Baghdad, Erbil and
Sulaymaniyah. Civil unrest in the country
delayed a planned launch last year, but Jonaid
insisted the flights are “definitely” going ahead.
Religious charters to Pakistan are also being
targeted for 2020, with management planning to
dry lease an A330 in order to maximise loads.
The decision to source an Airbus wide-body
might raise eyebrows given SaudiGulf’s well-
publicised memorandum of understanding
SAUDI ARABIA
‘a private
Three years as
company,
with no subsidies, has
given us a lot of insight
– real insight – into
behaviour, into the way
things have changed.
ABDULMOHSEN JONAID ’
(MoU) with Boeing, which covers up to 16 787s
and 777s. Majali had predicted that eight of those
units would be firmed up in 2018 with deliveries
starting in 2021 – but little has been heard of the
deal since.
Understandably, Jonaid kept his cards close to
his chest when talking about the MoU, saying
only: “These discussions are ongoing. We are
meeting with Boeing continuously.”
He was more forthright about the fate of
SaudiGulf’s founding order for 16 A220-300s –
originally marketed as Bombardier CSeries
CS300s. Although the commitment is still listed
in Airbus’ order and delivery report, he confirmed
it has now been “dropped completely”.
Asked about scheduled network development,
Jonaid said Cairo in Egypt and Khartoum in
Sudan are still front of the pack for new services
as the fleet grows.
Legitimate target
Europe is also a “legitimate target” further down
the road, with the chief executive hinting at
possible route launches to London Gatwick and
Milan from 2023 onwards. However, despite
calling the UK a “must” for SaudiGulf’s long-
term vision, he said market conditions will need
to be evaluated closer to the time.
British Airways became the third European
network carrier to serve Dammam in December,
when it added daily flights from its London
Heathrow hub via Bahrain.
Amid stiff competition at home and abroad,
SaudiGulf’s management team is playing the
long-game with a conservative growth trajectory
and an unwavering focus on safety and customer
service.
Though progress has been slower than
expected, the strategy gives Al-Qahtani Group
the best possible chance of securing its future in
Saudi Arabia’s lucrative skies.
“One thing that we cannot escape is the
mandate from our chairman, Sheikh Tariq Al-
Qahtani, to ensure that we deliver good service,”
Jonaid concluded. “His belief is that the Saudi
public deserves good service.” ■
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