What now for Saudi Arabian?
 

Hi everyone,

I've been looking at SV and thinking, where do they go from here?
Despite the rosy upbeat announcements of profitability and rising pax figures, there remains the odour of stagnation and decline in the Saudi flag carrier. Problems I see:

Hub problems: Jeddah is a disaster zone, and the much needed new terminal doesn't seem to be forthcoming anytime soon. They are constrained at the current terminal. It's totally unsuitable for connections.

Declining service: inflight product has fallen far behind the standards set by the competition. The quality of inflight service has also been declining. On the ground, things are worse. Ground services can at best be described as attrocious.

Bad image: The have a very poor image, thanks to declining standards, which is not helped by an inconsistent and badly executed corporate identity. They just don't look or act professional.

Fleet problems: Ageing widebodies (747 classics + A300s), poor choice of mainline narrowbody (the MD-90 is not as versatile as the A320 or B737NG, for instance it doesn't have the range for thin medium haul routes, and has poor residual value). We have to see how they go about freshening up their fleet in the upcoming years.

Declining network: Their network is shrinking alarmingly, particularly European destinations. This is in contrast to the competition who have much better coverage than SV does. They are fast turning into a regional carrier.

I'm not saying that Saudia is on the brink of collapse. But the way I see it, they're in the black because they have a soft local market pretty much all to themselves. But the landscape is changing. They are losing their domestic monopoly, and their longhaul operations face the considerable threat posed by aggressive rapidly expanding gulf carriers who are much more competitive than SV. The outlook is not good. They need to take action before it is too late. There is talk about privatisation, but will this bring about the needed changes?

Your opinions?

And what about the Royal Family's privileges on the fleet? Do they still have the "right" to use their aircraft for their own personnal needs?

We got used in Houston to see SV 747's stationned on the tarmac for days while a few Saudi individuals were there for "business" ... Does that affect the profitability of the airline?

I had one saudi student who told me they used 747 classics on domestic flights? :confused:
I hope he was kidding right?

I have been on a number of domestic flights on the classics. Feels like you step back into the 70's when you go on board.

The real shock though is that they are in 'Haj' configuration. Something like 444 all economy seats. The ultimate in sardine class.

lol, were all sardine seats occupied or empty??

hey mutt, I've posted a Q'n on the NAS thread, can u answer it ?

I know that, but that doesn't change the fact they are saddled with it. As for the MD90's capabilities, you would know better than me since you're an insider, but I have been lead to believe that it struggled to do JED-FCO when it was briefly deployed on that route. An A320 would do that without problems, and other other routes too, like JED-TUN, where a B772 is sent even though it is way too much plane for the route.

Athens was the last dropped, but the european network has been steadily declining over the last few years. Other than for LHR, SV has been forced to combine stations on "dog leg" routings.

For one thing streamline the bloated structure. It runs more like a government beurocracy than a public company. Consolidate fleet into fewer types (IMO replacing the 744s with the 773ER is a better choice than more 744s), completely overhaul ground services, update cabin and upgrade inflight service, concentrate on fewer hubs (ie relegate Dammam), etc... etc...
There's a lot that can be done. Maybe with public accountability, they can be spurred into action.

mutt: Nothing like an hour in the first class lounge munching on stale donuts and sipping apple juice before being greeted by sardine class. I got over it at the Jeddah Hilton though:O

Hakeem, they are always full

With reference to the comment about airport terminal capacity that's dreadful. The so called rulers of the land have the time, money and effort to spare on erecting pointless buildings in competition with each other yet have almost no idea about spending just a fraction of that on a simple terminal building. It doesn't have to be extravagent just extra capacity, after all new is new and that shiney look would bode well for the airline and country. Clearly common sense is as always lacking in the over fed Middle East. I doubt they could setup a used camel delaership in the desert :)

Hi Mutt,

So why did they drop the Athens routes ? The load factors were very high, so was wondering ............


I..

In terms of simple terminal building I meant forget about a mounment anything with capacity will do. After all the rest of the world commission such projects and many for whom money is more of a worry than the Saudis.

Quite simply I think the Saudi establishment (whatever that maybe) are acting like children and not planning ahead with any conviction. If they can build skyscraper that should be renamed Strato-scraper :O with little or partial demand for such office space then why not a more prcatical and functional terminal building. They have the money, land and demand for it.

If by corporate identity you mean colour scheme then Saudi Arabian's is by far one of the best in the industry, true it could have been better, I always imagined Royal Jordanian's curent scheme on them, it looks grand and is more suited to SV.

mutt,

It's all relative. Becoming a publicly listed company does entail a certain level of transparency. You never know, privatisation did wonders for STC, it could have a similar effect at Saudia.

BTW you're slightly out of date with the expansion plans. The NACO proposal has been dropped in favour of a new midfield terminal located between 34R and 34C (you know, north of the GA apron) that will totally replace the current terminals.

Boogie-nicey,

You've obviously never been to Jeddah. It's not shiny gleaming and flashy like Dubai (where those mega skyscrapers are being built). It's sadly a bit rundown. Which is a shame, because the city has much greater potential, if it wasn't for the people from Gasseem running the country to the ground.


newscaster,

I don't mean the new logo and scheme, which is sadly wasted by the incompetent PR department.

Fools 'n' Tameez,

You're right I have never been to Jeddah but still feel they have some resources more available to them that any countries and yet they still languish behind. Maybe they need someone from the 'outside' to show them the way.

Re MD90, the performance was so bad that on hot summer days it couldn't even make Athens-Jeddah non-stop. One Italian passenger who was travelling from Milan to Riyadh on an MD90 found his eventual route was Milan - Athens - Tabuk (for fuel) - Jeddah - Riyadh. He tried suing Saudia for infringing his human rights - being coped up down the back of an MD90 for 14 hours.

Yes, the 74 Classics have been doing Riyadh-Jeddah (about 1 hour 45m I think) for years and still do, as well as the 777s. Very often full load and a flight every couple of hours.

It's probably not too kind on the take-off/landing cycle aspect for the aircraft, but what's the alternative with that sort of traffic - an MD90 or Airbus every hour?

Passengers' alternatives are about 10 hours (legal ;) ) driving, with sparse (and very low-quality) "service areas", in real desert conditions, or a bus (slightly slower, but not much)

If I need my car there for any length of time and/or have a lot of equipment to take, then I'll drive - but for one or 2 days business trip, flying is the only way.

SV will add a 4th daily B777 frequency (summer only) on the JED-CAI route in June.

Mutt,

I know there are those in the world that are lazy and those that are incompetent but clearly Saudi seem to be both all of the time. What you mentioned about the annual meeting makes you wonder why invite shareholders in the first place? Farce, so say the least.

When the oil runs out in terms of demand not quantity no one will look at them again.

Yet among the most profitable.