Riyadh, August 23, 2010: Saudi low-cost private airline Sama said it will suspend all operations as for Tuesday until further notice, with Saudi press reports citing heavy financial losses.

Sama CEO Bruce Ashby the decision was taken only after the board failed to find an alternative to avoid the suspension. The company said it will accommodate passengers who had bookings for Tuesday on other airlines.

"Sama had been awaiting a significant aviation relief package with respect to fuel subsidies, subsidies for Public Service Obligation (PSO) routes, a gradual lifting of domestic fare caps, and additional funds to support the past losses and growth of our business," a statement by the Saudi airline said.

The carrier was unable to pursue any of these alternatives due to time constraints, the statement said, noting that although revenues were sharply up during the summer season, they had not been enough to cover the heavy losses it suffered during the winder.

According to an official with Sama who refused to be identified, the decision came after the airline suffered losses of one billion Saudi riyals (About 266 million U.S. dollars).

The airline received 200 million Saudi riyals as a loan from the government to cover fuel costs, and 500 million riyals from shareholders. Yet, it fell short of 300 million riyals needed to keep the operations running, the official told local Arab News newspaper.

Sama also faced intense competition from state-owned Saudi Arabian Airlines, which, he said, enjoyed government support and subsidized fuel.

The airline, in its statement, said it remains hopeful that a financial solution can be found soon to help it resume operations.

Sama, launched in 2007, was serving 10 destinations in the kingdom and neighboring countries with 164 flights a week.