Riyadh: On the occasion of the Holy month of Ramadan, SamaSama senior management was delighted to host the Saudi press at an Iftar event. Andrew Cowen, CEO was pleased to update the journalists present on key developments at SamaSama.

Mr Cowen said: "SamaSama has had a mixed summer. On the positive side our new international routes have performed well and we expect this good performance to continue. We have recently launched new routes from Dammam to Beirut and from Riyadh to Assiut and these are performing to expectations. We are planning further new international route launches in the coming months. We have also launched a number of customer focused 'Just for you' initiatives including our 'fly 9 flights get 1 free' programme that rewards loyal customers, a seat sale offering discounts of up to 60% off regular fares for those prepared to book early, along with a number of initiatives designed to improve the travel experience.

However, the serious issue which continues to trouble the SamaSama business is the performance of SamaSama's domestic routes. The combination of the fixed economy fare cap, which was set approximately eight years ago and has not changed since, along with ongoing cost inflation, particularly fuel means that it is impossible for SamaSama to make money on domestic routes, despite high passenger demand and full aircraft. Even though we have adopted the low cost airline business model, flying domestic routes has led to SamaSama incurring significant losses. This is because SamaSama cannot pass on the fuel price increases, for which we pay full market rate compared to the subsidised rate that Saudia makes which represent 5 times cost difference.

For example, SamaSama served the holy city of Medina from Dammam and Riyadh but had to pull off these routes after incurring accumulated losses of over SR40m in a year of flying. We were regularly filling over 80% of our seats but simply were not able to charge fares that covered the cost of operating to Medina. So with great unhappiness, we had no choice but suspend services to Medina until the situation changes. Another example is the Dammam to Riyadh route. SamaSama loses approximately SR 40,000 on every flight between these two key cities, despite again very respectable passenger numbers. To reduce these losses, we have had to halve our number of services between Dammam and Riyadh.

Mr. Cowen went on to say: "SamaSama is a deeply committed Saudi company, dedicated to improving the choice of destinations and fares to the Saudi consumer. We also play a vital role in creating new job opportunities since 60% of SamaSama's employees are Saudis, for whom we have committed extensive training & development.

Our shareholders are fully supportive of SamaSama and recently decided to strengthen the company further with an additional SR200m of financing. But SamaSama cannot afford to continue to bear these sorts of losses on domestic routes and indeed SamaSama's Board of Directors has instructed the management team to evaluate suspension of all domestic flying until the situation improves and a reasonable return can be made. This is not a decision we have taken lightly but we have no choice.

The Civil Aviation AuthorityCivil Aviation Authority, GACAGACA have been extremely supportive of SamaSama and tried very hard to find a solution to these issues, and we are very grateful for that. We commend them for the substantial liberalisation steps already taken and urge them to continue with that liberalisation But the 'unfinished business' that needs to be completed is removal of the fare cap and ensuring that SamaSama is charged the same rate for aviation fuel as is received by Saudi Arabian Airlines. Otherwise will be enforced to reduce our domestic flights significantly and focus only on international routes.

-Ends-

Additional notes for Editor:
SamaSama is the newest Low-Fare Carrier in Saudi Arabia. Founded by Investment Enterprises Ltd, chaired by HRH Prince Bandar bin Khalid al Faisal on 2005, with 30 major Saudi private and institutional investors

A low fares airline is an airline which offers low fares by efficiently managing its operational costs and removing many traditional passenger frills that passengers don't value. Passengers or guests as we refer to them in SamaSama are encouraged to book early to get the best price.

SamaSama has 6 Boeing 737-300 aircraft as well as a Jetstream for the operation of regional services. These are maintained to the highest international standards. SamaSama plan to increase its fleet to 25 - 30 aircraft by 2010.

SamaSama's mission to be the most preferred low-fare airline in Middle East

SamaSama has more than 600 employees, with more than 60% of them being Saudi's.

First flight was on 18 March 2007, departing from King Fahad International Airport in Dammam to King Abdulaziz International Airport in Jeddah. Now, SamaSama operates more than 300 weekly flights.

SamaSama now flies to 12 domestic destinations (Dammam, Riyadh, Jeddah, Abha, Jizan, Hail, Arar, Jouf, Tabouk, and Rafha and Bisha). Fares begin from SR 69

SamaSama also operates international flights to 10 international destinations across the Middle East (Abu-Dhabi, Sharjah, Amman, Damascus, Latakia, Aleppo, Beirut, Alexandria, Asiut and now Sharm el Sheikh). Fares begin from SR 229.

SamaSama offers various way for booking, such as:

• Website: www.flysama.com

• Call Centre: 9200 05588

• Sales Centre: in all the main cities and airports

• Authorised Travel Agents (Inside Saudi Arabia and outside)

• SamaSama offers many ways for payment, such as:

  • Cash

  • Credit Cards (American Express, Visa, MasterCard)

  • Sadad (ATM and Saudi Banks websites)

• SamaSama's slogan is "Simply Fly" reflecting the simplicity of the travel experience with SamaSama. We also seek to promote the concept of advance booking to secure the lowest fares, adopted as "Book early, Save more" in a recent marketing campaign.

• SamaSama achieve "the best in Aviation Industry" 2008 award in Saudi Arabia from Arabian Business magazine

• SamaSama achieved "the best new brand launch" in the Middle East from GMR

© Press Release 2008

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