RIYADH, Jan 25: Saudi Arabian Airlines (Saudia), the national carrier, could be privatised within the next two years. Announcing this, Khaled Almulhim, the director general of Saudi Arabian Airlines, said: We have already started privatisation of the airline with the catering sector. In the process, Saudia intends to sell 30 to 40 per cent of shares in its strategic units.

Last September, Strategic Catering Company Ltd, which represents a consortium of three companies, won 49 per cent of Saudia Catering, one of the divisions of Saudi Arabian airlines.

Crown Prince Sultan, who is chairman of Saudi Arabian airlines, signed an agreement on Sept 23, 2007 with a consortium comprising Abdul Mohsen Al-Hokair Tourism and Development Company, Fowzan Holding and Newrest Group Holding to sell 49pc of Saudia Catering.

The sale came after the Cabinet gave the national carrier the green light to convert its strategic units into separate companies in preparation to privatise the airline, the largest in the Middle East with a fleet of 120 passenger and cargo planes.

On the basis of the Cabinet decision, we’ll establish six companies for catering, maintenance, cargo, ground service, aviation service, and Prince Sultan Aviation Academy, Almulhim said.

Saudia offered to privatise its catering division in August last year and received tremendous response from investors. Saudia Catering recorded SR643 million ($171 million) revenue and SR142 million ($37.8 million) net profit in 2005.

Saudia Catering currently supplies 25,000 meals daily to 48 airline companies. The supply would reach 100,000 meals in peak seasons, Almulhim said. It has won several international awards.

The next strategic unit slated for privatisation is cargo, the Saudia chief said. It will be followed by privatisation of the ground service unit and maintenance unit.

The civil aviation service, which is the core activity of the airline, will be the last to be privatised, he added.

He said the participation of strategic partners in the new companies would strengthen the airline, adding that the selling process would be carried out in a transparent manner. The companies will sell part of their capital in light of market share and assets, ensuring good prices for the airline.

Investors in each company should have the necessary qualification and experience, he said, adding that offers made by investors would be opened in the presence of their representatives. The top three bidders will be given another chance to review their bids and make final offers, he added.