Saudi Arabia has granted SaudiGulf Airlines a licence to operate domestic flights within the kingdom, the first such award in a long-planned liberalisation of the aviation market, state news agency SPA reported.

SaudiGulf, based in the eastern city of Dammam, received regulatory approvals from Saudi Arabia's General Authority of Civil Aviation (GACA) on June 9 and was granted its air operator certificate in a formal ceremony in Riyadh on Wednesday night.

Previously, only national carrier Saudi Arabian Airlines and budget operator National Air Services were allowed to serve a domestic market of about 27 million people.

Foreign carriers could fly in and out of Saudi Arabia, but not within the country.

The Saudi authorities began accepting applications to allow other airlines to operate internal flights in 2012 and SaudiGulf, owned by the Abdel Hadi Al-Qahtani & Sons group, had initially planned to start operating internal flights in 2014.

The "Arab News" website reported that SaudiGulf will begin domestic flights in September and expects to start international flights to Dubai by the end of the year.

Representatives of SaudiGulf were not available for immediate comment on Thursday.

Qatar Airways, through its subsidiary for the Saudi market, Al Maha Airways, also received an initial carrier licence in 2012 but has yet to be given final approval to operate flights in the kingdom. – Reuters