Congratulations! Saudi Arabia is to soon get its own Low Cost Private Airline.
Finally, SV's rule is going to end on Saudi skies.

Arabic speakers may visit:
www.flysama.com

New Saudi Budget Airline Announced
(Reuters)
February 5, 2006
Saudi Arabia's first low-cost airline Sama plans to start flights within months and expects to carry at least half a million passengers by the end of the year, a company executive said on Saturday.

Sama, which means elevation in Arabic, will lease up to seven Boeing 737 aircraft by December to tap the lucrative domestic market before starting regional services, chief executive Andrew Cowen said.

"Serving neighboring Gulf countries will depend on authorities' approval," he said. "The market here is important, with a population of more than 25 million and very strong demand from a customer base left with little choice in terms of prices."

Saudi authorities are gradually liberalizing air transport services by opening domestic flights to private investors. The kingdom also plans to privatize the flagship carrier Saudi Arabian Airlines.

With a paid-up capital of SAR200 million riyals (USD$53.3 million), Sama was founded by Investment Enterprises, which is chaired by Prince Bandar bin Khalid al Faisal. It has about 30 other shareholders, including the Olayan Financing Company.

Sama will begin serving mainly Riyadh, Dammam and Jeddah, carrying frequent travellers and pilgrims, Cowen said. The firm aims to post a profit by end-2007 at the latest, he added.

"We aim to reach 10 million passengers by 2010... from, let's say, half a million by the end of December 2006," Cowen added, hinting that the target for this year was a modest estimate.

The company will directly employ 350 people in its first year and 1,200 by the end of 2010.

Sama officials told reporters that the company would within a few years offer investors an equity stake which will be listed on the Saudi bourse. They did not elaborate.

Another Saudi firm, National Air Services (NAS), said last year it would launch a low-cost airline and was negotiating with European plane maker Airbus to buy four A320s.

NAS says it will also set up a USD$100 million luxury airline, Al Khayala, to fly between the capital Riyadh and the Red Sea city of Jeddah, but has not said when either airline will start.

Khayala started last year, NAS's LCC is scheduled to be launched this summer.

I think Sama has the edge. They've got a good team which seems to know what they're doing. I don't think they're a big threat to SV , who are happy to focus more on the business market, but they would be a massive thread to Air Arabia and Jazeera etc... if and when they start to operate international routes. They would have the massive advantage of a large domestic network.

"We aim to reach 10 million passengers by 2010... from, let's say, half a million by the end of December 2006," Cowen added, hinting that the target for this year was a modest estimate.

I think 10 million is an impossible figure in 4 years!