28-Jan-2010 8:36 AM

Sama Airlines to discontinue public service obligation flying until aviation policy is set

Sama Airlines stated (26-Jan-2010) it would discontinue its Public Service Obligation operations from 02-Feb-2010, due to a "long-running delay in the formulation of a comprehensive aviation policy" within the Kingdom of Saudi Arabia. Sama's PSO routes include Dammam-Hail, Hail-Gurayat, Hail-Rafha, Hail-Tabuuk and Dammam-Bisha. Sama CEO, Bruce Ashby, stated Sama has incurred more than SAR50 million (USD13.3 million) in losses related to PSO operations since its startup, and that Sama pays approximately ten times as much for its domestic fuel as Saudi Arabian Airlines, which "benefits from a long-standing fuel subsidy not available to Saudi Arabia's private airlines". [more]

Sama: "Since Sama's commercial launch in March 2007, we have been operating PSO flights at a large loss. 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," Bruce Ashby, CEO. Source: Company Statement, 26-Jan-2010.

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