Saudi Airlines domestic inflight catering soars, but international growth still grounded
Saudi Airlines Catering is enjoying a remarkable domestic revival from the effects of COVID-19, but the same cannot be said for the company’s international operations, according to the company's chairman, Mohammed Al-Sarhan.
Speaking to Arab News on the sidelines of the SACC’s 40th anniversary party, held on Sunday at the Saudia Club in Jeddah, Al-Sarhan said that aviation is the sector that has been most harshly affected by the pandemic.
“All domestic and international flights came to a halt, and all of the companies that relied on aviation for their main income were detrimentally affected,” he said.
“As for us, some 70 percent of our revenue came from the aviation sector. In fact, all the company’s profits depended on aviation,” Al-Sarhan said, adding that when air traffic was suspended, the damage was immense, and greatly influenced the company’s liquidity.
Al-Sarhan pointed out that his company responded to the unpleasant situation by taking a number of measures to keep extant.
“One of these measures was cutting costs in several areas. We also benefited from governmental programs like SANED, which was launched for the Saudi workers by the labor Ministry. Moreover, we decreased the number of foreign workers, however, the damage was still huge. Therefore, we launched a strategy focusing on diversifying income through providing food to other sectors, such as healthcare, sports, entertainment, education, military sector, and paramilitary sectors, such as prisons,” he said.
Al-Sarhan added that all of these sectors are showing great promise and that his company has the full capabilities and infrastructure to serve them.
The chairman said that many workers lost their roles after the new restructuring of the company, and were then requalified for new positions. But the company could not requalify some 440 other employees, he added, and therefore a golden-check settlement was reached with them and their service was ended.
He noted that some of these terminated employees were Saudis, but the majority were expatriates.
Al-Sarhan told Arab News that the catering sector in Saudi Arabia has not yet fully recuperated from the shocks of the pandemic. However, he said, the sector is seeing a significant recovery, especially for domestic flights.
“On the level of domestic flights, the sector has recuperated by 90 percent, but on the level of international flights, we are still going through a below-40 percent recovery rate. With the omicron COVID-19 variant, only Allah knows what will happen. Some countries have suspended flights, so we can’t tell what the future effect would look like,” he said.
Al-Sarhan added that what was once a strategic option has now become a matter of life, and that the company is moving forward on solid grounds that allow them to enhance strategic growth as the demand for air traffic and tourism in the Kingdom returns.
“In the meantime, we continue our investment in digital transformation and automation to build a more resilient and effective company for the future. We will continue to work together to diversify our business and speed up recovery to create added value for our customers and the national economy of the Kingdom and contribute to achieving Saudi Vision 2030.” Al-Sarhan said.
SACC CEO Wajdy Al-Ghabban said the catering company is looking to the future with hope and determination to provide the best services.
“Through our company’s new strategy, we will focus on achieving a greater degree of balance between in-flight catering activities and other business activities by improving catering services, developing the catering business and facilities management, transforming retail activities, and exploring new opportunities for organic and inorganic growth that will further increase the scope and strength of our business,” Al-Ghabban said.
“All domestic and international flights came to a halt, and all of the companies that relied on aviation for their main income were detrimentally affected,” he said.
“As for us, some 70 percent of our revenue came from the aviation sector. In fact, all the company’s profits depended on aviation,” Al-Sarhan said, adding that when air traffic was suspended, the damage was immense, and greatly influenced the company’s liquidity.
Al-Sarhan pointed out that his company responded to the unpleasant situation by taking a number of measures to keep extant.
“One of these measures was cutting costs in several areas. We also benefited from governmental programs like SANED, which was launched for the Saudi workers by the labor Ministry. Moreover, we decreased the number of foreign workers, however, the damage was still huge. Therefore, we launched a strategy focusing on diversifying income through providing food to other sectors, such as healthcare, sports, entertainment, education, military sector, and paramilitary sectors, such as prisons,” he said.
Al-Sarhan added that all of these sectors are showing great promise and that his company has the full capabilities and infrastructure to serve them.
The chairman said that many workers lost their roles after the new restructuring of the company, and were then requalified for new positions. But the company could not requalify some 440 other employees, he added, and therefore a golden-check settlement was reached with them and their service was ended.
He noted that some of these terminated employees were Saudis, but the majority were expatriates.
Al-Sarhan told Arab News that the catering sector in Saudi Arabia has not yet fully recuperated from the shocks of the pandemic. However, he said, the sector is seeing a significant recovery, especially for domestic flights.
“On the level of domestic flights, the sector has recuperated by 90 percent, but on the level of international flights, we are still going through a below-40 percent recovery rate. With the omicron COVID-19 variant, only Allah knows what will happen. Some countries have suspended flights, so we can’t tell what the future effect would look like,” he said.
Al-Sarhan added that what was once a strategic option has now become a matter of life, and that the company is moving forward on solid grounds that allow them to enhance strategic growth as the demand for air traffic and tourism in the Kingdom returns.
“In the meantime, we continue our investment in digital transformation and automation to build a more resilient and effective company for the future. We will continue to work together to diversify our business and speed up recovery to create added value for our customers and the national economy of the Kingdom and contribute to achieving Saudi Vision 2030.” Al-Sarhan said.
SACC CEO Wajdy Al-Ghabban said the catering company is looking to the future with hope and determination to provide the best services.
“Through our company’s new strategy, we will focus on achieving a greater degree of balance between in-flight catering activities and other business activities by improving catering services, developing the catering business and facilities management, transforming retail activities, and exploring new opportunities for organic and inorganic growth that will further increase the scope and strength of our business,” Al-Ghabban said.