Saudi Gazette report

JEDDAH — Prices of all air tickets increased by 5 percent with the introduction of the value-added tax (VAT), according to the General Authority for Civil Aviation (GACA).

The authority confirmed that airlines operating on domestic routes will not raise their fares due to the increase in fuel price, according to Al-Madina newspaper.

However, all price controls will be lifted by 2019 and airfares will be completely left to the market forces, GACA said.

GACA spokesman Abdullah Al-Kharif said the authority seeks to create an environment of fair competition between domestic airlines in order for them to provide the best services at the lowest rates.

"There will be no price increases due to the increase in fuel prices. The authority has allocated SR370 million about two years ago to support low altitude flights on domestic routes," said Al-Kharif.

He said the authority designated Hail and Abha airports as hubs for airline services at northern and southern regions respectively.