SGS, Saudia amend ground handling services deal

Saudi Ground Services (SGS) agreed on Wednesday with Saudi Arabian Airlines (Saudia) to change prices of some optional services in their ground handling services deal, SGS said in a statement to Tadawul.

Prices of basic handling services will remain unchanged in the agreement, which is effective from April 1, 2017 to Dec. 31, 2020.

Meanwhile, new services will be offered, including direct communication with the pilot along with other aircraft cleaning services, the statement said.

Performance fines were also modified for both parties, which will positively reflect on SGS’ profit, despite difficulties in measuring the expected financial impact.

SGS added that it expects a SAR 31 million drop in its revenue due to price modifications, assuming no change in the number of flights and usage of optional services.

However, it is difficult to measure the final impact on the company’s annual revenue, which is based on the number of flights and use of optional services.

The deal will be submitted to the upcoming general assembly meeting for approval, SGS said, adding that Saudia’s board representatives did not discuss or vote on the agreement.

Saudia is a related party, represented in the SGS board of directors by Abdullah Al Jefri and Mohammed Al-Salmi.