A new Saudi low-fare airline under the name of Sama, meaning “high flying”, is seeking government approval to start flying this summer, with a leased fleet of one-class Boeing 737-300s. The emergence of competition to flag carrier Saudi Arabian Airlines has been facilitated by the deregulation of the domestic market, and a new determination by the Saudi government and the wider Gulf Co-operation Council countries towards free trade and open skies.

Sama Airlines Saudi Arabia W445

© SAMA

Sama was founded by Investment Enterprises, headed by Prince Bandar bin Khalid al Faisal, with the support of UK-based Mango Aviation Partners, which specialises in low-fare start-ups, and 30 Saudi private and institutional investors, with the aim of opening up air travel in this vast desert kingdom. In the longer term, governed by the speed of liberalisation of the international market, Sama plans to expand regionally. “Sama has an international dimension to its business plan,” says chief executive Andrew Cowen, “but the domestic market will be the heart of the operation.”

The airline will initially link 10 of Saudi Arabia’s main towns and cities, planning to offer fares below the artificial cap imposed by regulation. Unlike Saudi Arabian, which has lost heavily on domestic routes, Cowen says Sama’s low-cost structure and aircraft better matched to the market will enable it to operate profitably.

Sama’s traffic will be made up of Haj and year-round Umrah pilgrims, and business and leisure passengers. If its plan works out, it will have a fleet of seven 737-300s by year-end. But it will face further competition from United Air Services, also with strong government connections, which is the only other company likely to be licensed in the first phase. The conditions are right for both to prosper, and with only 7 million travelling on domestic routes at present, there is scope for growth. ■

Source: Airline Business

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