Saudi companies licensed to provide Umrah services are now seriously considering merger proposals, following big losses estimated at more than SR150 million ($40 million) suffered by them during the past three months.

Representatives of the companies attending an annual meeting here confirmed a plan to merge the companies to strengthen their position in the market a local report said.

They said "some sort of a merger agreement has already been reached".

The companies said business was deeply affected by the September 11 attacks in the US and subsequent events.

Conflicts between Saudi companies and their foreign agents have also affected business.

It said Yasser Al Kholi, executive president of Labbaik Ñ one of the companies specialised in Umrah and Haj services Ñ called for more co-operation between the companies to maximize the use of the new Umrah system.

He said more than 900,000 pilgrims had come to perform Umrah this year under various Umrah companies.

The government has licensed 250 companies to offer the service. But nearly 15 per cent of them have yet to start their operations.

The Ministry of Haj recently closed and fined 25 Umrah companies for neglecting their contractual obligations to pilgrims.