Saudia pursues closer links with SkyTeam members

It is hardly a surprise that one of Jaan Albrecth’s priorities as Saudia CEO is to pursue a more active role in SkyTeam. After all, Mr Albrecht was CEO of Star Alliance for a decade, from 2001 to 2011.  Saudia joined SkyTeam in May-2012 but was not active in its initial years as a member. It had a limited number of codeshare partnerships and was not fully exploiting the benefits of membership.


Summary:

  • Saudia is aiming to better leverage its membership in SkyTeam by forging new and expanded codeshare partnerships with other members;
  • The Saudi Arabian carrier joined SkyTeam in 2012 but had a relatively inactive role in the alliance until former Star Alliance CEO Jaan Albrecht joined Saudia in 2017;
  • Saudia Cargo is now in the process of joining SkyTeam Cargo, which Mr Albrecht co-founded in 2000.

Mr Albrecht joined Saudia in early 2017 (following stints as CEO of Austrian Airlines and SunExpress) as Saudia was embarking on a major transformation programme. While the transformation has involved many different aspects – including cost cutting, fleet renewal and product improvements – partnerships and extracting more benefits from a global alliance is an area close to Mr Albrecht’s heart.

“I’m a promoter of course. I’m fascinated by the opportunities of an alliance, having been at Star for 10 and a half years. I know the benefit to the airline individually of what an alliance can do,” Mr Albrecht told CAPA TV last month.

“What I have always said at Star and what I’m repeating here at Saudia now is 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 you dues, paying your monthly fees. You have to go there and you have to sweat a little to become fitter.”

Mr Albrecht added that when he joined Saudia the airline “was not really an active member in the alliance. We were benefiting from the top layers but we were not really going to the gym, to the fitness club to become fitter. In that that way we have changed.”

Saudia has set up a new alliance team which has been travelling around the world to talk to SkyTeam members. Mr Albrecht said Saudia has gradually been forging new codeshare deals and expanding existing partnerships but this work is still in the early phases.

The airline now has codeshares with 10 SkyTeam members: Aeroflot, Air Europa, Air France, Alitalia, China Southern, CSA Czech Airlines, Garuda Indonesia, KLM, Korean Air and Lebanon’s Middle East Airlines (MEA). China Southern and Garuda were added in 2017 after Mr Albrecht joined Saudia.

Saudia still does not yet have any bilateral relationships with nine SkyTeam members. “We are in the process still of changing,” Mr Albrecht said. “We are signing more codeshare deals. We are getting closer to the airlines. With the opening of the new Jeddah hub we are starting to capture the attention of several members.”

In Jeddah, Saudia has been operating out of an outdated terminal at King Abdulaziz International Airport with bus gates and limited amenities, but will complete a move to a new terminal featuring 47 gates and modern transit facilities by Apr-2019. The new terminal will enable Saudia to pursue more sixth freedom traffic and start promoting Jeddah as a SkyTeam hub.

MEA and Garuda are the only other SkyTeam airlines serving Jeddah. However, the new terminal and opportunities to plug into Saudia’s network and improved transit product is attracting other members to consider serving Jeddah and/or adding Saudia as a codeshare partner.

Saudia also announced in Sep-2018 that its subsidiary Saudia Cargo will join SkyTeam Cargo. Mr Albrecht said Saudia Cargo, which operates six freighters and markets Saudia’s belly space, will formally join SkyTeam Cargo in early 2019. He pointed out that similar to the passenger side, there are alliance opportunities on the cargo side that it was not initially pursuing. Saudia is placing more attention on cargo as part of the group’s transformation by investing in new products and warehouses and by joining SkyTeam Cargo.

SkyTeam Cargo was founded in 2000 by Aeromexico Cargo, Air France Cargo, Delta Air Logistics and Korean Air Cargo. Eight members have since joined but Saudia did not initially participate. Ironically, Mr Albrecht was CEO of Aeromexico Cargo when SkyTeam Cargo was launched in 2000, making it a full circle for the airline industry veteran.

HEAR MORE about Saudia’s plans for better leveraging its membership in SkyTeam and its increased focus on cargo in this exclusive CAPA TV interview with Saudia CEO Jaan Albrecht filmed on the sidelines of the Nov-2018 CAPA Asia Aviation Summit in Singapore.