What role do you expect air freight/cargo to play within the broader National Industrial Development and Logistic Plan and what are the key areas of focus for the aviation industry to position KSA as an efficient export platform and regional logistics hub?
The Kingdom of Saudi Arabia is strategically well positioned to serve and reach all key markets connecting to and from the Middle East. On a national scale, the urgency for change is mirrored and emphasized even more as we all align with the Saudi Vision 2030. We see air freight and logistics combined getting an ever more important profile in order to realize the Saudi government's long-term vision of diversifying its economy in variant ways that do not rely heavily on the oil sector. Saudi Arabia currently has 28 airports of which six are international. Out of the six, three are among the busiest in the GCC region, connecting the country to 81 international airports within 45 countries across the globe. The Saudi Arabian Government is rapidly modernizing its airports and expanding its air cargo facilities with the goal of increasing the total air cargo capacity in the Kingdom from circa 1 million tons a year to 6 million tons/year by 2030 and within this framework last year, Saudia Cargo invested SAR1.2 billion to rejuvenate its cargo stations in Jeddah and Riyadh, aiming to double the current cargo capacity, enhancing our logistical capabilities in support to the Saudi Vision 2030 that aims to establish Saudi Arabia as a global logistics hub. Official statistics which were produced by General Authority of Civil Aviation (GACA) recorded the number of passengers that have passed through the Kingdom's airports in 2018, with 99.86 million passengers on 771,829 flights, through the Kingdom's international and domestic airports. In addition, we expect the air freight industry to play a crucial role on the broader National Industrial Development through increasing employment & enhancing the national logistical capabilities. Saudia Cargo recently celebrated the graduation and the employment of the first batch of Cargo Future Cadres program which aims to empower Saudi youth in logistics & supply chain sectors.
As Vision 2030 seeks to achieve air cargo capacity liberalization, what is your assessment on the provision of PPP and concession contract opportunities for the development and operation of air freight facilities and where do the major opportunities for this type of engagements lie?
Saudi Arabia is unique in terms of engaging the private sector having stakes in major projects across the country irrespective of its financial capabilities to undertake those commitments on its own. The PPP (Private Placement Programs) and concession contract opportunities are very positive because it provides checks, balances, and accountability on the part of stakeholders, thus, ensuring the success of the projects' completion and sustainability. Given the future scenario of an increasing population in the region and more dynamic business activities, under the guidance of the Saudi Arabian Government, the General Authority of Civil Aviation (GACA) has announced that all 28 airports around the kingdom should be privatized by 2020 in order to enhance revenues, improve customer experience as well as encouraging the best in class international operators, and increased private sector investments. Partnerships and opportunities in the construction of new airports and aviation infrastructure, including air freight facilities are immense. We are supportive of the model and positive drive and remain open to this philosophy and as such will further explore opportunities and partnerships in the future. In the framework of Public-Private Partnership (PPP), Saudia Cargo has signed a joint agreement with King Abdullah Port at King Abdullah Economic City, 90 kilometers north of Jeddah, to enhance collaboration opportunities & establish a secure logistical operations zone. This agreement establishes an Air-Sea-Air cargo corridor with the surrounding airports to ensure a smooth flow of cargo to the port and re-export it by air in line with the Saudi Vision 2030 aiming to turn the Kingdom into an international logistics hub.
Given the broad and interconnected scope of the air freight industry and Saudi Arabia's position between Asia, Africa, and Europe, what are some of the key international players and markets that Saudi Arabia, through Saudia Cargo, is looking at with growing interest to foster partnerships and why?
Bridging the gap between the East and the West and beyond had always been the goal for Saudia Cargo. We continue to further strengthen our key markets in Africa, South Asia, Europe, Latin & North America through new Interline partnerships and alliances with major international players aiming at bridging the world with a dedicated freighter fleet. In April, Saudia Cargo officially became the 12th member of SkyTeam Cargo which counts as its long-time members— Aeroflot Cargo, Aerolineas Argentinas Cargo, Aeromexico Cargo, Air France Cargo, Alitalia Cargo, China Airlines Cargo, China Cargo Airlines, Czech Airlines Cargo, Delta Cargo, KLM Cargo, and Korean Air Cargo. Our membership will give our customers access to a global network covering over 900 destinations in more than 175 countries. In return for that unparalleled access to a growing worldwide network, our company will extend SkyTeam Cargo's reach across the Middle East, Africa and the Indian subcontinent via our hubs in Jeddah and Riyadh, which was nonexistent prior to our joining SkyTeam. Such partnerships are very crucial in this industry where global connectivity is paramount today. Customer experience is of utmost importance to the industry and the customer is searching for reliability and timely delivery of their goods hence enhanced connectivity's will ensure meeting their expectations. Our strength lies in covering a wide route network and we believe in trade liberalization. We're ready to expand our wings domestically, regionally and internationally wherever there are opportunities and the need for our air cargo services.
What are the major trends impacting the global air cargo industry and how are they incorporated in driving your strategic priorities for 2019?
The world is fast changing and part of that rapid change is going digital. We believe that digitalization holds the key to growing the air cargo industry in order to speed up and streamline the process in the best possible way hence meeting and exceeding customer expectations. Many air freight carriers have formed partnerships with digital start-up platforms to give customers access to real-time quotes, a wide range of information about products and services and to easily track and monitor their shipment status. Saudia Cargo strives to enhance & foster its capabilities thus last year the company represented Fly Pharma product to meet the growing demand for the efficient transportation of pharmaceuticals, moreover the company launched Fly Express service, & invested in its infrastructure at Jeddah & Riyadh Cargo stations in order to provide state of the art Ground Handling services in the Kingdom. This is something that we would like to explore further in the future as the air freight and logistics industry in Saudi Arabia grows. Speed and efficiency would dictate transactions of the future. Blockchain technology is another area that the industry might want to tap into. This financial tech method is already in use in many industries and is something that we could also benefit from in order to speed up the process and offer more transparency in a secure environment. We are also focusing on Back 2 Basics principles of simplicity and sustainability. Less complex instructions and SOPs and more aligned practical performance criteria ensuring the stability of performance controls and easy to use practices in order to deliver consistency, compliance, and reliability. We are of course re-emphasizing training and coaching of our people in order to build a solid platform for the future.
An efficient transfer and localization of logistics technologies is a key requirement to drive economic growth in the Saudi air cargo industry. Looking at Saudia Cargo, where have technological upgrades brought the highest impact on your business model and what are other areas you expect to be affected the most?
We're proud to say that Saudia Cargo was among the first in the region to embrace technology to promote business. We have embraced the electronic-airway bill, improved various other platforms like our new website and improvements and upgrades in our IT systems. We have also initiated a blog-spot where the latest developments and news about the air freight industry in the Kingdom and beyond are highlighted in addition to launching our new website providing our clients access to their shipment tracking through the E-Services section. We're strongly investing in this area because we believe the future lies in digitalization. By upgrading our technology and coping with the country's e-government 2030 vision, Saudia Cargo has managed to integrate internal and external parties as well as national and international stakeholders to drive more transparency, traceability and better data quality within the global supply chain throughout the shipment journey. Going digital and eliminating paperwork leads to expediting the shipment process, thus, positively impacts the economy. We are, however, fully embracing these targets and working closely with stakeholders to drive efficiencies in all areas and will continue to support all positive changes. Within digitizing efforts Saudia Cargo has fully gone cashless and announced that cash is no longer accepted at its stations, the company urged clients to use digital channels and different banking payment methods such as ATMs, SADDAD, Points of Sale (POS) and bank transfers. The going-cashless decision aims to give customers more flexible settlement options, save their time and improve the quality of services.