Sama Airlines to Suspend Operations
Saudi Arabia's Sama Airlines will suspend all operations from today following hefty losses. The decision was taken after the airline recorded losses of SR1 billion ($266 million), according to a Sama official.
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.
The decision was not an easy one for the airline and was taken only after failing to find an alternative, Sama CEO Bruce Ashby was quoted as saying by Arab News.
Sama has informed the General Authority of Civil Aviation of its plan, said GACA spokesman Khalid Al-Khaibari.
Ashby said Sama faced intense competition from state-owned Saudi Arabian Airlines, which enjoyed government support and subsidized fuel.
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.
The airline said it remained hopeful that a solution can be found to allow resumption of operations over the next few days.
Sama was created in 2005 and flew to 10 destinations within Saudi Arabia and neighboring countries with 164 weekly flights. In February, it halted flights to 5 Saudi cities.