The airlines, mainly Sama and Nas, have already borrowed SR200 million from government agencies and private banks.
Sources at the airlines attribute their immense losses to an alleged partisan attitude toward them.
“We are not treated fairly when compared to the Kingdom’s national carrier. Saudi Arabian Airlines gets aviation fuel at the cheapest rate. However, we have to pay a much higher amount. We are also forced to operate flights on some routes that are not profitable,” one source said.
Sama announced in February this year its decision to halt its domestic services on unprofitable routes, including services to and from Hail, Dammam, Al-Qurayat, Rafha and Tabuk, as well as between Dammam and Bisha.
The airline attributed the decision to losses amounting to over SR50 million since launching these routes. Sama also said it is forced to pay fuel prices 10 times higher than what Saudia pays.
Adnan Dabbagh, executive president of the new private airline Al-Wafeer Air, said the Kingdom’s private airlines have incurred huge losses ever since they launched services.
“There are several factors for this. First and foremost is the exorbitant operation costs and comparatively lower revenue,” he said.
Dabbagh said fuel prices make up nearly 60 percent of the operation costs of private airlines. “However, this is only 20 percent in the case of Saudia.
The national carrier has to pay only 45 cents for a gallon of aviation fuel while we are forced to pay $2.60 per gallon. Moreover, GACA raised various charges at airports, including those for takeoffs and landings and parking as well as for security,” he said.
Sources at Sama and Nas also pointed out that they incur huge losses flying domestic routes.
These airlines have no right to hike fares in accordance with the increase in operation costs, the sources said, adding that they are therefore forced to halt services on certain routes that incur huge losses.
“Despite Saudia getting high incentives, especially low-cost fuel, even some of its domestic services are running at a loss,” said Ali Al-Harbi, a specialist in the aviation industry.
He also said that private airlines need to pay aviation fuel prices that are seven times higher than what Saudia pays.
While underlining the need for aviation authorities to urgently intervene to save private airlines,
Al-Harbi said attention needs to be paid in how aircraft are used on domestic routes, adding that it is inappropriate to use a huge aircraft on routes carrying only 50 passengers.
Al-Harbi stressed that budget airlines should have carried out necessary feasibility studies before launching their services.
Meanwhile, Al-Madinah newspaper quoted a source at the General Authority for Civil Aviation (GACA) as saying that the body is determined to solve the problems facing the country’s budget airlines.
“GACA had carried out a comprehensive study in cooperation with the international consultancy firm SH&E in this respect. The authority, which is currently looking into a series of recommendations put forward by the study panel, will take appropriate measures to solve problems and further improve the services rendered by these companies,” the source said, while stressing that they are keen to make available better flight services to all cities in the Kingdom at reasonable fares.
