Saudi Arabia moved a step closer to allowing new airlines to operate out of the kingdom, after its top aviation authority short-listed companies vying for a license to cater to fast growing demand in the Middle East’s biggest economy.

The General Authority of Civil Aviation (GACA) has prequalified seven out of the 14 companies that bid earlier this year for a new airline license to operate domestic and international flights in the kingdom, according to state-run Saudi Press Agency.

The companies include Saudi-Chinese consortia and Saudi-Gulf consortia, the report said, citing GACA, but didn’t disclose the name of the firms.

The aviation authority has already started to hand the request for proposal document, or RFP, to the prequalified firms, the report added, while noting that GACA officials plan to meet with the firms in August to advise them on their bids.

The short list of firms comes after a senior GACA official in May told Zawya Dow Jones the kingdom intends to phase in new airlines to avoid an abrupt crowding of the sector, after first unveiling such a plan last year as it looked to shore up its under-developed transport sector.

“We have a constraint that you can’t give too many licences at the same time,” Faisal al-Sugair, vice president at the General Authority of Civil Aviation, said at the time.
The authority is expected to issue licences by the end of September, officials have previously said.

The Arab world’s largest economy currently has two operational airlines-state-owned Saudi Arabian Airlines and low-cost carrier National Air Services. Its third carrier, Sama Airlines, ceased operation last year after talks with the government failed to yield a commitment to support the company.

Government support however could emerge as a key criterion in attracting foreign airlines to the Saudi market.