Sama Airlines, which launched in Saudi a year ago, has taken one million
bookings and claims to be 80 per cent cheaper than the state owned airline.
But marketing director Andrew Cowen said today that low-cost airlines still
only accounted for two per cent of passengers in the Middle East, compared
with 30 per cent in Europe and the US.
“The Middle East is the best low-cost aviation opportunity in the world,” he
told a seminar at Arabian Travel Market in Dubai. “Open skies are coming,
even in the Middle East.”
Sama and another low-cost airline, Nas Aviation, set up in competition with
flag carrier Saudi Arabian Airlines in 2007 – but they are still fighting
protectionism which benefits the state airline, he said.
While SAA pays 80 per cent below market rate for fuel, Sama has to full price
- currently $120 a barrel, which accounts for 45 per cent of running costs.
Sama is also obliged to operate loss-making domestic routes to desert towns
and has a government cap on economy fare pricing.
“There is still a lot of bias and protection surrounding flag carriers ,” said
Cowen. But he added: “There is a lot of debate now going on about how to
maintain domestic routes while I think the fare cap will come off. It’s just
a politically sensitive issue.”
The ability to set low prices for early bookers will incentivise early
bookers, Cowen predicts – currently, 90 per cent of Saudis book within two
weeks of travel. But it will also boost international visitors able to get
around Saudi and the Middle East much more easily.
Sama has compensated for fare restrictions within Saudi by expanding rapidly
on international routes in the past year. It now flies to nine cities
including Alexandria and Beirut, with most routes into Riyadh and Jeddah.
It is unlikely the airline will expand into Europe, with central Asian
countries like Uzbekistan more on the cards. But one destination being
considered is Istanbul - which would then tie in with easyJet's operation
from the UK.
Details: www.flysama.com
