Sama suspends operations after SR1 billion loss

By GHAZANFAR ALI KHAN | ARAB NEWS

RIYADH: Sama Airlines will suspend all operations from Tuesday until further notice, the airline said Sunday.

Flights will operate as planned on Monday as Sama makes urgent arrangements to accommodate stranded passengers on other airlines.

Sama CEO Bruce Ashby said the decision was not an easy one for the airlines and was taken only after failing to find an alternative.

Sama has informed the General Authority of Civil Aviation of its plan, said GACA spokesman Khalid Al-Khaibari.

The decision to suspend operations was taken after the airline recorded losses of SR1 billion, according to a SAMA official who refused to be identified.

The airline, which received SR200 million as a loan from the government to cover fuel costs and SR500 million from shareholders, fell short of the SR300 million needed to keep operations on track, he added.

He added that above all, Sama faced intense competition from state-owned Saudi Arabian Airlines, which enjoyed government support and subsidized fuel.

"Sama had been awaiting a significant aviation relief package with respect to fuel subsidies, subsidies for PSO routes, a gradual lifting of domestic fare caps, and additional funds to support the past losses and growth of our business," said a Sama statement. "In addition, we sought for, and found, more than one potential new equity investor willing to inject cash into the business."

The airline added that it was unable to pursue any of these alternatives due to time constraints.

"Sama, and all other airlines throughout the region, experienced very low fares and somewhat slow demand for regional travel during the winter season," the statement said.

The airline said that although revenues were up sharply during the summer peak season, it had not been enough to offset the heavy losses it suffered during the winter.

Sama expressed regret over the inconvenience caused to its customers.

The airline said it remains hopeful that a financial solution can be found to allow resumption of operations over the next few days.

Passengers scheduled to fly from Tuesday are urged to contact Sama regarding alternative travel arrangements.

Comments

SAUDIBOZO

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but NAS has been doing well I belive. Sucess lies in serving your customers well. And operating more routes.

ALI

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Oh no, why u r my favourite air line, i luv u sama, please dun go.

JHOW RANDY

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Its a shame to the KINGDOM OF SAUDI ARABIA .... A SHAME ...AN AIRLINE CLOSED DOWN??? because of fuel prices....whats next NAS AIR closed down also?
The KSA the richest country in the world, with a poor kind of aircraft a 20year old, saudis are nothing to indonisia,yemen,egypt, jordan,abu dhabi,dubai...what the hell is all about..

TAHA M AHMAD

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Indeed it is a very sad news. I hope that GACA could do something about it as it is very much required to have an airline catering to the domestic market due to unavailability of Saudi Airlines oftenly.
I wish GACA could provide the subsidised fuel rate to SAMA as it does for Saudi Airlines.

GULNAWAZ ALI

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It's good for the customer if Samba stop thier operation.........................very painful night when i was Travel Jeddah-Riyad-Dammam in 2008. thier is no. Customer care that time, our flight was 4.45PM but they arrenge it on 2.00 AM after make some shouting on thier offers by Amrican travelar. It's good for us if they stop thier operation.
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