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Saudia plays the name game, joins the alliance and gets privatisation rolling

Posted 29 May 2012 · Add Comment

Saudi Arabian Airlines has today been formally renamed Saudia and has become a full member of the SkyTeam alliance while at the same time confirming the first stage of the long-awaited privatisation will go ahead in the next month.

"Joining SkyTeam is an integral part of Saudia's long-term transformation strategy, which includes rebranding our airline, restructuring core operations and enhancing on-board products and airport services," said Khalid al-Molhem, Saudia's director-general (pictured left)

Saudia has become the 16th Team member joining airlines such as Air France-KLM, Delta and Kenya Airways. The alliance welcomed the move – which was first announced last year – saying Saudia will be SkyTeam’s first member from the Middle East, adding 51 new destinations to the alliance network.

"We are responding to passenger demand for increased travel choice within the Middle East by adding a significant player from the region," SkyTeam's managing director Michael Wisbrun said. “Saudia's membership adds value to the alliance by opening up the considerable Saudi Arabian market to our customers,"

Prior to joining SkyTeam, the airline embarked on a four-year turnaround programme that it aims to complete by 2013. This included modernising its IT, commercial, operational and financial platforms. As well as a fleet renewal plan by ordering 90 new aircraft.

The airline has been known as Saudia - the name it used between 1972 and 1996 – and has recognised the brand value. The new name takes immediate effect.

Meanwhile progress has been made on the privatisation of parts of the airline. On Sunday, Saudi Arabia's Capital Market Authority (CMA) has given approval for Saudia to offer 30% of its catering unit.

The long-awaited share-sale in Saudi Airlines Catering Company (SAAC) is the first part of the Saudi flag carrier to be listed as part of the privatisation plan, announced in 2006, that will also see cargo, maintenance, airlines, flight academy and ground handling hived off to the private market.

According to Reuters, the SAAC offering will consist of 24.6 million shares, which will be sold to the public between June 18-24. The IPO, which analysts have formerly estimated will be worth between $400 million-540 million has been delayed before, with the company initially targeting a flotation date in late 2010.

Credit Agricole has advised the company on its IPO.

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