| Sama Airlines grounds all flights |
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| Monday, 23 August 2010 07:44 | |||
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The airline said: "The decision to stop flying was not taken lightly, but we have spent many months seeking alternatives, and now this is the only option remaining to us." "The decision was taken after the airline recorded a loss of 1 billion riyals ($266 million), said a board member before the announcement. Sama, which 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, he said, declining to be identified," reports Bloomberg. Sama's CEO Bruce Ashby explained: "We 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. In addition, we sought for, and found, more than one potential new equity investor willing to inject cash into the business. Unfortunately, none of these alternatives came together in the required timeframe. "Sama, and all other airlines throughout the region, experienced very low fares and somewhat slow demand for regional travel during the winter season (October 2009 through March 2010). Although revenues were up sharply during the summer peak season, it has not been enough to offset the heavy losses we suffered during the winter. "We deeply regret any inconvenience caused to our customers, but we must do what is necessary to preserve the integrity of our operations. Since January 2009 we have run a safe, reliable airline that flies on time and we have received broad-based support for our plan of measured growth. We remain hopeful that a financial solution will be found that will allow us to restart operations in the coming few days." Flight operations will continue as planned through Monday, 23rd August, and Sama is seeking arrangements to accommodate passengers affected by flight cancellations through arrangements with other airlines. If you have been affected by the collapse of Sama, check WhichBudget.com for route alternatives:
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Comments |
Sama Airlines, Saudi Arabian low cost airline, announced yesterday that it would discontinue all flight operations as of Tuesday 24th August 2010.