Strategic partnership to enhance logistics services
SAL Saudi Logistics Services Company (SAL), a leading ground handling and air cargo provider in the Kingdom, announced the signing of a strategic contract with Saudi Airlines Engineering and Aerospace Industries Company (SAEI), the technical and engineering arm of the Saudi Airlines Group. The five-year contract aims to provide integrated logistics solutions at SAL's air cargo facilities at King Abdulaziz International Airport in Jeddah.
Contract details and its economic dimensions
According to the official statement issued by SAL and published on the Saudi Stock Exchange (Tadawul), the agreement includes leasing dedicated spaces, managing warehouse operations, and providing a comprehensive suite of ground handling and warehousing services. The agreement is characterized by its flexibility, as its total value depends on the actual demand for services at agreed-upon prices, ensuring cost efficiency for both parties and reflecting the dynamic nature of operations in the aviation sector. This contract further strengthens the existing relationship between the two companies, especially since Saudi Airlines Engineering and Aerospace Industries already owns a 49% stake in SAL.
General context and importance of partnership for Vision 2030
This partnership is particularly significant as it aligns directly with the objectives of the National Transport and Logistics Strategy, a key pillar of Saudi Vision 2030. This strategy aims to solidify the Kingdom's position as a global logistics hub connecting three continents by developing airport and seaport infrastructure and enhancing the efficiency of logistics services. By improving handling and storage operations for the aircraft maintenance sector, this contract will contribute to enhancing the operational efficiency of King Abdulaziz International Airport, one of the region's busiest airports, and support the overall growth of the Saudi aviation sector.
Expected impact on the aviation sector
This agreement is expected to have a tangible positive impact on the Kingdom’s aircraft maintenance, repair, and overhaul (MRO) supply chain. By providing specialized and highly efficient storage and handling solutions, Saudi Arabian Airlines Engineering and Manufacturing Company (SAL) will be able to expedite the delivery of spare parts and equipment for maintenance operations, thereby reducing aircraft downtime and increasing operational readiness. This will not only enhance the capabilities of the national carrier but also boost the Kingdom’s attractiveness as a leading regional hub for aerospace engineering and manufacturing services. SAL also emphasized transparency by disclosing the indirect interest of certain members of its Board of Directors in this contract: Ahmed bin Abdulaziz Al-Wasiya, Ibrahim bin Adel Shira, and Fahad bin Abdullah Mousa, in accordance with the highest standards of corporate governance.
