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Sama Airlines ceases operations

Aviation news: Saudi budget airline Sama out of business

Wael Mahdi  Aug 22, 2010

Sama, one of two low-cost airlines in Saudi Arabia, will stop its services from Aug. 24 as the company failed to get government support and find investors after incurring losses.

Government help in the form of fuel subsidies and the removal of price limits on domestic routes failed to materialize, the Dammam-based airline’s Chief Executive Officer Bruce Ashby said today in e-mailed statement. “We also tried to find strategic investors who are ready to invest in the company and pump the necessary liquidity to enable Sama to operate.”

The decision was taken after the airline recorded a loss of 1 billion riyals ($266 million), said a board member before the announcement. Sama, which received 200 million riyals as a loan from the government to cover fuel costs and 500 million riyals from shareholders, fell short of 300 million riyals to keep the operations on track, he said, declining to be identified.

Sama, which started in 2007, operated six Boeing 737-300s and is chaired by Prince Bandar bin Khaled bin Faisal, according to the carrier’s website. The airline flew to 10 destinations within the kingdom and neighboring countries with 164 weekly flights, according to the website.

“We still hope to reach the necessary financing solutions to allow us to resume domestic and international flights in coming days,” Ashby said in the statement. The General Authority of Civil Aviation has been informed by Sama of its plan, the regulator’s spokesman Khalid al-Khaybari said in a phone interview today.

Riyadh-based National Air Services was the first Saudi low- cost carrier to get licensed. National Air and Sama competed with state-owned Saudi Arabian Airlines, which receives government support and subsidized fuel.

Aviation news: Saudi budget airline Sama out of business
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