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Sun 12 Aug 2012 12:04 PM

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New domestic carrier to be offered cheap fuel

The move will mean the new carrier can compete with Saudi Airlines on an equal footing

New domestic carrier to be offered cheap fuel

When the successful bidder for Saudi Arabia’s new domestic licence is announced in October it will be able to buy fuel at the same discounted price as national carrier Saudi Arabian Airlines, it was reported at the weekend.

The Saudi aviation regulator said the successful licence holder, for which Bahrain’s Gulf Air and Qatar Airways are in the bidding to obtain, will be able to buy discounted fuel, Riyadh-based Eqtisadiah newspaper reported.

The move is an important as the higher fuel costs was a major factor in the demise of Saudi low-cost carrier Sama Airlines, which collapses in August 2010.

“Sama, and all other airlines throughout the region, experienced very low fares and somewhat slow demand for regional travel during the winter season (October 2009 through March 2010). Although revenues were up sharply during the summer peak season, it has not been enough to offset the heavy losses we suffered during the winter,” Sama CEO Bruce Ashby said at the time.

Last month it was revealed seven carriers were in the running to obtain he licence, with Bahrain’s Gulf Air and Qatar Airways short-listed among the final bidders.

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