The following terms, as used in these Regulations, shall have the assigned meanings unless the context indicates otherwise:

• ‘Regulations’ means these Air Transport Economic Regulations and includes any orders, directives and interpretations issued thereunder.

• ‘ICAO’ means International Civil Aviation Organization.

• ‘Authority’ means the General Authority of Civil Aviation.

• ‘Law’ means the Civil Aviation Law of Saudi Arabia.

• ‘Kingdom’ means the Kingdom of Saudi Arabia.

• ‘Economic License’ means an authorization provided by the Authority, which empowers an undertaking to conduct a specific activity that falls within the jurisdiction of the Authority and is subject to economic regulations.

• ‘Economic Approval’ means an authorization granted by the Authority to a foreign air carrier, limited in scope and duration, permitting it to provide charter air transport.

• ‘Permit’ means the authorization that is given to an aircraft for crossing the Kingdom airspace or landing in one of its airports for commercial, diplomatic or other purposes. It can be a permit for scheduled flights or a temporary permit for non-scheduled flights.

• ‘Designation’ means the approval granted by the civil aviation authorities in the Kingdom and other countries to air carriers for regular flights. The approval is based on air transport services agreements signed between the respective authorities and in accordance with bilateral memorandums of understanding.

• ‘Applicant’ means an undertaking that applies to the Authority for a license, permit or approval as the case may be.

• ‘Undertaking’ means any natural or legal person, whether profit-making or not, or any official body whether having its own legal personality or not.

• ‘Air Carrier’ means an undertaking offering or operating airlines for passenger, mail and/or cargo carriage.

• ‘National Air Carrier’ means an undertaking established in the Kingdom, holding a valid national air carrier economic license issued by the Authority under these Regulations, which authorizes it to transport passengers, mail and/or cargo on domestic or international routes.

• ‘Scheduled Air Carrier’ means an air carrier open for public and functioning according to an announced schedule or regularly or in a clearly repetitive way within regular noticeable flights.

• ‘On-Demand Operator’ means undertakings established in Saudi Arabia seeking to provide non-scheduled transport by air of passengers, mail and/or cargo for remuneration and/or hire, using normal category aircraft or transport category aircraft in VIP configuration, where the entire planeload capacity has been contracted by a single undertaking and not sold to another party.

• ‘Foreign Air Carrier’ means any air carrier established outside of Saudi Arabia, which is owned and controlled by foreign nationals.

• ‘International Air Transportation’ means the carriage by aircraft of passengers, mail and/or cargo for compensation or hire, or the operation or navigation of aircraft in the conduct or furtherance of a business or vocation, in commerce between a place in the Kingdom and any place outside thereof; whether such commerce moves wholly by aircraft or partly by aircraft and partly by other forms of transportation.

• ‘Air Service’ or ‘Commercial Air Service’ refers to an air transport flight or series of flights performed by civil aircraft for remuneration. Services may be either scheduled or charter.

• ‘Charter Air Service’, ‘Charter Flight’ or ‘Charter’ means non-scheduled commercial air transportation passengers, mail and/or cargo, on a time, distance, or trip basis where the entire planeload capacity of one or more aircraft has been engaged.

• ‘Scheduled Air Service’ means any flight scheduled in the current edition of the Official Airline Guide, the carrier’s published schedule, or the computer reservation system used by the carrier.

• ‘Public Service Obligation (PSO) Route’ means a crucial route for a region’s economic and social development, which is maintained to meet certain standards, even if it’s not commercially attractive to air carriers.

• ‘General Aviation’ means air transport operations for a purpose other than commercial air transport or aerial works.

• ‘Normal Category Aircraft’ an aircraft type certified under GACAR Part 21 to the airworthiness standard as prescribed in GACAR Part 23 (normal category airplanes).

• ‘Transport Category Aircraft in VIP configuration’ an aircraft type certified under GACAR Part 21 to the airworthiness standard as prescribed in GACAR Part 25 (transport category airplanes) and configured in VIP setting from the manufacturer.

• ‘Flight’ means:

  a. with regard to passengers and unchecked baggage, the period of transport of the passengers by aircraft including their boarding and disembarkation;

  b. with regard to cargo and checked baggage, the period of transport of baggage and cargo from the moment the baggage or cargo is handed to the air carrier until the moment of delivery to the entitled recipient;

  c. with regard to third parties the use of an aircraft from the moment when power is applied to its engines for the purpose of taxiing or actual take-off until the moment when it is on the surface and its engines have come to a complete stop or the moving of an aircraft by towing and push-back vehicles or by powers which are typical for the drive and the lift of aircraft, particularly air streams.

• ‘Local Flight’ means a flight not involving carriage of passengers, mail and/or cargo between different airports or other authorized landing points.

• ‘Flight Cycle’ means the operation of an aircraft from take-off to its next landing.

• ‘Passenger’ means any person who is on a flight with the consent of the air carrier or the aircraft operator, excluding on-duty members of both the flight crew and the cabin crew.

• ‘Baggage’ means both checked and unchecked baggage.

• ‘Air Fares’ means the prices to be paid to air carriers or their agents or other ticket sellers for the carriage of passengers on air services and any conditions under which those prices apply, including remuneration and conditions offered to agency and other auxiliary services.

• ‘Air Operator Certificate (AOC)’ means an Air Operator’s Certificate issued by the Authority’s flight standards department to a national carrier to operate specific commercial air transport activities.

• ‘Foreign Air Operator Certificate (FAOC)’ means a Foreign Air Operator Certificate issued by the Authority’s flight standards department to a foreign air carrier to operate specific commercial air transport activities.

• ‘Airworthiness Certificate’ means a document issued by the Authority of the registration state by virtue of which the airworthiness of the aircraft is adopted for a specific period of time provided the operator commits to the conditions stipulated in the certificate.

• ‘Business Plan’ means a detailed description of the air carrier’s intended commercial activities for the period in question, in particular in relation to the expected market development and the investments to be carried out, including the financial and economic implications of these activities.

• ‘Capacity’ means the number of seats, or the payload offered to the general public on an air service over a given period.

• ‘Effective Control’ means a relationship constituted by rights, contracts or any other means which, either separately or jointly and having regard to the considerations of fact or law involved, confer the possibility of directly or indirectly exercising a decisive influence on an undertaking.

• ‘Force Majeure’ means any event beyond the reasonable control of either party to a contractual agreement, which could not have been reasonably foreseen at the date of the agreement being signed.

• ‘Key Personnel’ includes directors, president, chief executive officer, chief operating officer, all vice presidents, the directors or supervisors of operations, maintenance, sales and marketing, and finance, and the chief pilot of the applicant or air carrier.

• ‘Management Account’ means a detailed statement of income and costs of an air carrier for the period in question including a breakdown between air-transport-related and other activities as well as between pecuniary and non-pecuniary elements.

• ‘Air Service Agreement’ means an agreement between the Kingdom of Saudi Arabia and a third country governing aviation relations.

• ‘Marketing Alliance Agreement’:

  • Code sharing – means an arrangement between two or more airlines where they agree to market and sell seats on each other’s flights under their own airline designator codes;

  • Blocked space – also known as a capacity purchase agreement or pro-rate agreement, is an arrangement between airlines where one airline purchases a fixed number of seats on another airline’s flight and resells them under its own brand;

  • Joint venture – means a collaborative business arrangement between two or more airlines that pool their resources, assets, and expertise to achieve a common objective, such as expanding market presence or improving operational efficiency;

  • Equipment use between air carriers – means an arrangement where one airline provides aircraft, crew, maintenance, and insurance services to another airline.

• ‘MTOM’ means the Maximum Take Off Mass, which corresponds to a certified amount specific to all aircraft types, as stated in the certificate of airworthiness of the aircraft.

• ‘Principal Place of Business’ means the head office or registered office of a national air carrier of the undertaking within which the principal financial functions and operational control of the activities referred to in this Regulation are exercised.

• ‘Relevant Traffic Rights’ means the traffic rights granted to the Saudi Arabia under or by virtue of an air service agreement.

• ‘Scarce Capacity’ means the capacity which exists for providing air services where the relevant traffic rights are insufficient to enable all qualifying carriers who would wish to operate services on a route, to provide all the services they would wish to provide.

• ‘Express Integrator’ means the provision of logistics services, focused on the transportation, management, and completion of all procedures related to cargo and mail from their origin to their final destination. These services are conducted under the name of the service provider or their appointed representative.

• ‘SDR’ means a Special Drawing Right as defined by the International Monetary Fund.

• ‘State Aircraft’ means an aircraft owned by the Kingdom and designated for serving non-commercial public interest purposes, such as military, customs and medical evacuation aircraft.

• ‘Third Country’ means a state other than Saudi Arabia.

• ‘Third Party’ means any legal or natural person, excluding passengers and on-duty members of both the flight crew and the cabin crew.

• ‘Total Aircraft Movements’ means all take-offs and landings by non-military aircraft. Includes aerial work flights, i.e., specialized commercial aviation operations which are performed by aircraft chiefly engaged in agriculture, construction, photography and surveying, as well as pilot training, business/executive flying and all other non-commercial flights.

• ‘Wet Lease’ means an agreement between air carriers pursuant to which the aircraft is operated under the AOC of the lessor.

• ‘Dry Lease’ means an agreement between undertakings pursuant to which the aircraft is operated under the AOC of the lessee.

• ‘Violations and Penalty Committee’ refers to a committee who’s role is to investigate any breaches of the Civil Aviation Law, its accompanying regulations, and government orders issued by the General Authority of Civil Aviation; in doing so, it issues decisions on the appropriate penalties for these violations

• These Regulations cover the issuance of the following economic licenses and approvals:

• Economic licenses for national air carriers;

• Economic licenses for on-demand operators;

• Economic licenses for foreign air carriers operating scheduled air transport;

• Economic approvals for foreign air carriers operating charter flights for the purpose of Hajj and Umrah;

• Economic licenses for aviation service representatives.

  2. Without prejudice to other laws and regulations applicable in Saudi Arabia and instructions issued by the Authority, all other air transport activities that are not explicitly mentioned in Paragraph 1 above shall not be required to obtain an economic license or approval from the Authority to operate within, into, out of, or over the territory of Saudi Arabia. This includes but is not limited to general purpose foreign charter flights for purposes other than Hajj and Umrah and general aviation activities.

  
  

  3. The Authority shall not grant economic licenses or approvals or maintain them in force where any of the requirements of these Regulations are not complied with.

  
  

  4. All national and foreign air carriers are required to comply with the passenger protection rights regulation issued by the Authority by addressing complaints in a fair and transparent manner, and to publish on their website an approved and updated copy of the regulations issued by the Authority, in Arabic, English and any other relevant language as well as a clear mechanism for receiving and responding to customer complaints.

  
  

  5. The economic license is deemed the property of the licensee. It is prohibited to transfer the ownership of the license or assign it to another individual or entity. Where required, a new license application shall be submitted.

1- For the issuance of a national air carrier economic license for scheduled air transport, the Authority shall issue a notice of invitation to interested parties. Such a notice shall indicate:

• The requirements and specifications; and
  

• Any restrictions to the routes that may be services under such an economic license.

2- Any undertaking established in Saudi Arabia, wishing to obtain an economic license for the purpose of carrying by air passengers, mail and/or cargo for remuneration and/or hire, in regime scheduled or charter, shall meet the following requirements:

• Its principal place of business is located in Saudi Arabia;

• Saudi Arabian nationals own more than 50% of the undertaking and effectively control it, whether directly or indirectly through one or more intermediate undertakings;

• It demonstrates that, with respect to financial standing and liquidity it can meet at any time its actual and potential obligations established under realistic assumptions, for a period of 24 months from the start of operations and it can meet its fixed and operational costs incurred by operations according to its business plan and established under realistic assumptions, for a period of 90 days from the start of operations, without taking into account any income from its operations;

• It submits a business plan for, at least, the first two years of operation. The business plan shall also detail the applicant’s financial links with any other commercial activities in which the applicant is engaged either directly or through related undertakings;

• It complies with the minimum insurance requirements as detailed in Article 15 of this regulation;

• It has one or more aircraft at its disposal through ownership or a dry lease agreement;

• It has provided proof of payment of the national air carrier economic license fee to the Authority;

• It has submitted all relevant information as detailed in Annex 1.1.

3- The Authority may decide to grant exemptions from the requirement for ownership and control by Saudi nationals as outlined in Paragraph 2 (b) to undertakings seeking to, as part of their operations as an express integrator, carry by air exclusively mail and/or cargo, for remuneration and/or hire in such cases where the Authority deems it in the national interest.

1- Any undertaking established in Saudi Arabia, wishing to obtain an on-demand operator license shall meet the following requirements:

• Its principal place of business is located in Saudi Arabia;

• Saudi Arabian nationals own more than 50% of the undertaking and effectively control it, whether directly or indirectly through one or more intermediate undertakings;

• It demonstrates that, with respect to financial standing and liquidity, it has minimum starting capital of SAR 500,000;

• It complies with the minimum insurance requirements as detailed in Article 15 of this Regulation;

  
  
  

• It has provided proof of payment of the on-demand economic license fee to the Authority;

  
  

• It has submitted all relevant information as detailed in Annex 1.2.

• The Authority shall grant an economic license to a foreign air carrier seeking to carry by air, into or out of Saudi Arabia, passengers, mail and/or cargo for remuneration and/or hire in regime scheduled that meets the following requirements:

• Its principal place of business is located outside Saudi Arabia;

• It provides a copy of its FAOC issued by the Authority;

• It has legal representation in the Kingdom, either through the presence of a branch of the foreign airline company in the Kingdom or by contracting with a commercial agent licensed in the Kingdom;

• It complies with the minimum insurance requirements as detailed in Article 15 of this Regulation;

• It has provided proof of payment of the economic license fee to the Authority;

• It has submitted all relevant information as detailed in Annex 1.3.

Before granting an economic license, the Authority shall consider whether the services are undertaken in accordance with designation rules, traffic rights and conditions provided under the air service arrangements Saudi Arabia has signed with the state where the foreign air carrier is registered.

• Without prejudice to the provisions of laws and regulations in force in the Kingdom, the Authority shall grant an economic approval to a foreign air carrier seeking to operate charter flights transporting passengers for the purpose of performing Hajj or Umrah if the applicant meets the following requirements:

• Its principal place of business is located outside Saudi Arabia;

• It provides a copy of its FAOC issued by the Authority;

• It has legal representation in the Kingdom, either through the presence of a branch of the foreign airline company in the Kingdom or by contracting with a commercial agent licensed in the Kingdom;

• It complies with the minimum insurance requirements as detailed in Article 15 of this Regulation;

• It provides an unconditional and irrevocable bank guarantee issued by a Saudi bank and approved by the Authority, to cover the cost of return of the maximum number of pilgrims coming via the air carrier at any time during the period of validity of the economic approval, the value of which shall be communicated by the Authority to the air carrier upon request;

• It provides an unconditional and irrevocable bank guarantee issued by a Saudi bank and approved by the Authority, to cover all pilgrim catering and accommodation costs, as described in the regulations for transporting pilgrims to the Kingdom and returning them to their countries;

• It has provided proof of payment of the economic license or approval fee to the Authority;

• It has submitted all relevant information as detailed in Annex 1.4;

2. The Authority may exempt foreign air carriers from the requirements of Paragraph 1 (e) above, in accordance with the mechanism set out in Annex 1.6.