Saudia Seeks Greater Role In SkyTeam, Joins SkyTeam Cargo
Saudia CEO Jaan Albrecht discusses the airline’s plans for better leveraging its membership in SkyTeam. Saudia joined SkyTeam in May-2012 but in the first six years was a relatively inactive member. Under Mr Albrecht’s leadership, Saudia is now pursuing a more active role and working on forging codeshares with more SkyTeam members. A new terminal at Jeddah significantly improves Saudia’s ability to connect with partners and Jeddah’s position as a SkyTeam hub. Saudia is also now in the process of joining the SkyTeam Cargo alliance, which it expects to formally enter in early 2019. Mr Albrecht is a major promoter of alliances given his background, serving as CEO of the Star Alliance for over 10 years. Mr Albrecht was also CEO of Aeromexico Cargo when it became one of the founding members of SkyTeam Cargo in 2000.
Transcript
Jaan Albrecht:I'm a promoter, of course. I'm fascinated by the opportunities from an alliance. Having been at Star for 10 and a half years, I know the benefit to the airline individually, what an alliance can do. But what I always said in Star and what I'm repeating here now in Saudia is that an alliance is like a fitness club. You can enroll in a fitness club to become fitter, but it's not a matter of only paying your dues, paying your monthly fee. You have to go there, you have to sweat a little bit to become fitter. And in the case of Saudia, when I arrived, I saw that we were not really an active member of the alliance. We are displaying, of course, SkyTeam. We're benefiting from being part of the top players in the worldwide aviation industry, but we were not really going to the gym, to the fitness club to become fitter. And that we have changed, that we are in the process still of changing. We are signing more codeshare deals, we are getting closer to the airlines. With the opening of the new hub in Jeddah, we know that we are attracting the attention of several of our members. Today we are not really able to offer connectivity beyond Jeddah because of this very bad infrastructure in the South Terminal. But with the opening of the new terminal, suddenly— I made a presentation a year ago to the SkyTeam board, and yes, there is a lot of attention, a lot of interest. And how do you see the future of Saudi Airlines? attractiveness from the airport, from the infrastructure, from Saudia, of course, to become a much more active partner. So, yes, we're in there and we are being more active and we will certainly become much more active in the alliance. We have now a new management team in the alliance department. They are touring the world, they are talking to our members, they are signing these new agreements. So, yes, it's definitely part of it. If you are a member of the alliance, you try to get the most out of the alliance. And this is another big opportunity that we have exploited over the last year, particularly. and that we will continue exploiting going forward. Yeah, it's quite important. We have our own company in the holding now, Saudia Cargo. Saudia Cargo operates, sells the bellies of our— altogether we have 75 widebody aircraft, 777s, 787s, A330s. These are great aircraft for belly freight. And we operate 6 owned aircraft, 2 748s and 4 777s cargo. And we then also have ACME aircraft. We have wet-lease for the cargo operations. So Saudia Cargo is very important. Unfortunately, it's more like an import market, less exports from Saudi Arabia. So it's seasonal, but it's basically an unbalanced market like most of the cargo markets are. But it is— we're putting a lot of focus, a lot of attention on the cargo market. We know that there is a huge opportunity to grow. We're investing heavily in new warehouses, both in Jeddah and in Riyadh. We're investing in new products, the pharma product. So yeah, it's one of these other areas where Saudia is doing a lot, and we know that we will be gaining also from this part of the revenues on the aircraft. So we just joined SkyTeam Cargo, actually just announced that we are joining. We'll be joining early next year. We're preparing Saudia Cargo to become a member of SkyTeam Cargo. So that's another opportunity, exactly the same example with the passengers. If you are a member of the alliance, look for the benefits, work hard, identify your partners, integrate products, be creative with your partners, and this is exactly what we're also doing in the cargo market. Yeah, it's mainly the imports, it's mainly the import market into Saudi Arabia, for all around the world. So we operate to Asia, we operate to Europe, of course, to Africa, so it's heavy inbound traffic. on the freighters, and then the big business that we have with the 75 wide-body aircraft. So the belly business is big, but it's mainly 3rd and 4th freedom, so it's inbound market. Yes, we do also, and we know that in the future with the hub we'll be able to offer a very good end-to-end product on the 6th freedom, making some connections in Jeddah, which until now we have not been able to do. What are the challenges you are facing?
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