JEDDAH: Sama Airlines has announced it will discontinue its Public Service Obligation (PSO) flying as of Monday (Feb. 2) because of a “long-running delay in the formulation of a comprehensive aviation policy within Saudi Arabia.”
Sama’s PSO routes include flights between Dammam and Hail, Hail and Gurayat, Hail and Raffa, Hail and Tabuk and Dammam and Bisha. Sama will accommodate customers who had booked flights on Sama’s PSO routes beyond Monday with a refund, the airline stated in its media announcement Wednesday, which is also posted on its website. “The carrier will continue to fly along all of its other existing routes across the Kingdom and nearby countries,” a spokesman for the airline told Arab News.
“Since Sama’s commercial launch in March, 2007 we have been operating PSO flights at a large loss,” Sama CEO Bruce Ashby stated. “We are mandated by the government to fly these routes, which have limited passenger demand and also regulated limits on the fares that we can charge. Unlike Saudi Arabian Airlines, we receive no subsidies or fee waivers on these services, and our business simply can not afford to continue operating PSO routes without having these issues resolved,” he added.
Ashby said Sama had incurred more than SR50 million in losses related to PSO flying since its startup, and that Sama pays approximately 10 times as much for its domestic fuel as Saudi Arabian Airlines, which benefits from a long-standing fuel subsidy not available to the Kingdom’s private airlines.
In May 2008, a special council of ministers met under at the request of Custodian of the Two Holy Mosques King Abdullah to determine a plan for aviation policy going forward that would address this issue, as well as other critical aviation policy issues such as the price of fuel paid by airlines, the fare limits on domestic flights, and financial aid for the private airlines, including Sama, that have been paying for the losses resulting from these issues. At that time, the special council of ministers proposed an interim plan including some reductions to fuel price and financial assistance for the airline, with a commitment given to the king to study the larger issues and formulate a long-term policy by Nov. 15, 2009,” Ashby said.
“It is now more than two months past the deadline agreed to, and no measurable progress has been made. We have been very vocal in expressing the urgency of the need to deal with these issues, and the situation has now reached the critical level. We deeply regret any inconvenience caused to our customers, but we must do what is necessary to preserve our business,” he added.
“We are not asking for a handout or special treatment. What we are asking for is an aviation policy that allows for competitive pricing, that provides all national carriers the same prices for basic services such as fuel and landing fees, and a recognition that private carriers should not be required to perform public services with losses that will drive them out of business. Neither consumers nor the airlines benefit from indecision and delay with respect to these issues, and what we are seeking immediate action to fulfill the commitment given for last November,” he said.
