Officials at the General Authority of Civil Aviation (GACA) in Saudi Arabia have confirmed they will allow foreign airlines to operate domestic flights in the country in order to rivitalise the aviation industry.
At present price caps in the Middle Eastern destination make it unfeasible for international airlines to offer flights in the country.
Low-cost airlines such as Air Arabia could be among the first to benefit.
Foreign airlines are to be allowed to bid for licences before the end of next month the (GACA) said in a statement.
The move will add pressure to Saudi Arabian Airlines and low-cost carrier Nas Air, the two remaining domestic carriers in the kingdom.