Royal Jordanian returns operations to profitability

AMMAN — Royal Jordanian (RJ) announced in a press statement on Wednesday that  it generated JD27 million net pretax profit in the first nine months of this year.

The amount represents a 272 per cent increase from the JD15.7 million net loss registered during the same period in 2014, the statement said.

“The net profit after tax for the first nine months of 2015 reached JD21.4 million, an increase of 236 per cent over the corresponding period of last year,” it indicated. 

RJ’s Chairman Suleiman Hafez expressed satisfaction with the company’s positive results, describing them as a quantum leap during a period when air transportation is still affected by the instability in the neighbouring countries which negatively influences travel and tourism to Jordan and the Middle East. “These results will help the company continue the current restructuring process,” Hafez said in the statement. 

He attributed the noticeable improvement in financial results to the efficiency and loyalty of the staff and its keenness to implement the board’s vision and the 5-year strategic plan since the beginning of the year. 

“The strategy focuses on restructuring in all areas, increasing revenues and reducing the operating cost, while improving the quality of services and maintaining RJ’s leading position among the airlines in the Levant ,” the chairman added.

RJ has been Jordan’s national carrier for the last 52 years, he remarked. 

Noting that air traffic is seasonal in nature, Hafez indicated that airlines, including RJ, normally achieve better financial results in the second and third quarters which are marked by active traffic during the summer season.

As such, the gains are earned in the peak seasons and holidays and not in the first and last quarters of each year when the number of travellers drop.

The chairman pointed out that the cost-control policy of the airline resulted in reducing operational spending in the first nine months of this year by 22 per cent compared to the same period of last year. 

He mentioned that RJ’s gross profit amounted to JD85 million, 95 per cent higher than the corresponding period of last year.

The gross profit was achieved when JD434 million of operatinal costs was deducted from the earnings that totalled JD519 million.

Elaborating further, Hafez said in the statement that the fall in fuel prices this year contributed to a drop in expenses besides operational efficiency which played a key role as a number of the network’s stations were closed due to their weak feasibility and the number of aircraft were reduced accordingly.

“At the end of last year, RJ shut down Delhi, Mumbai, Colombo, Lagos, Accra, Milan, Alexandria and Al-Ain stations,” the statement quoted the chairman as saying. “The airline also opened new markets in the region — Tabuk and Najaf.”

Additionally, RJ reduced the number of its aircraft in sync with the needs of the route network, which is continuously being assessed, in line with the airline’s strategies.

Noting that the company increased the frequency of flights to certain destinations in response to greater demand on travel particularly in the peak seasons, the chairman indicated that flights to Aqaba increased from 11 to 16 weekly, with changes to the schedule of flights to meet passengers’ needs.

He added that RJ will open new destinations worldwide before the end of this year.

“Flights to eight destinations — Damascus, Aleppo, Mosul, Tripoli, Benghazi, Misrata, Sanaa and Aden — are still halted due to security reasons,” Hafez elaborated. 

Hafez described RJ as a prominent Jordanian success story that constantly look for new and promising opportunities to increase revenues, enhance its competitiveness in the air transport industry and improve its air and ground services in a way that enables it to run safe and seamless flights to the passengers’ satisfaction and to achieve RJ’s vision of being the airline of choice that connects Jordan and the Levant with the world.