Saudi Airlines low-cost carrier Sama to cease operations after huge loss

One of Saudi Arabia's two low-cost airlines, Sama, is to cease operations from 24 August after the company failed to get government support and find investors after incurring losses of $266 million, report Bloomberg.

The airline’s CEO, Bruce Ashby, said in a statement today: “Government help in the form of fuel subsidies and the removal of price limits on domestic routes failed to materialise. 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.”

Sama which started operations in 2007 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.

The airline operated six Boeing 737-300s and flew to 10 destinations within Saudi Arabia and neighboring countries with 164 weekly flights, according to its website.

“We still hope to reach the necessary financing solutions to allow us to resume domestic and international flights in coming days,” said Ashby.

The General Authority of Civil Aviation has been informed by Sama of its plan.

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 subsidised fuel.