RJ achieves JD7.7 million net profits for the first half of the year
Wednesday, 29 July 2009

Amman, Royal Jordanian Board of Directors chaired by Nasser Lozi approved in its July 29, 2009, session the financial results for the first half of 2009. RJ, the oneworld member, achieved net profits of around JD7.7 million, against JD4 million in net losses incurred during the same period of last year.

The gross profit reached around JD19 million, against an operational loss of around JD3 million for the comparison period.

Lozi expressed satisfaction with RJ's ability to achieve positive results despite the challenges the air transport industry has been facing over the last six months, foremost among them the global economic crisis, which had a great impact on the traffic of passengers and cargo over the world. The revenues went down to JD274 million, from JD314 million that the airline attained in the first half of last year, marking a 12.7% decrease over last year.

RJ President/CEO Samer Majali said the profits came as a result of the decrease –19.6% – in the operational costs of the company in the first six months of this year, exceeding the decline in revenues. The cost-control policy succeeded due to great efforts exerted in managing the offered aircraft seats, which decreased by 7%, to the efficient operation of the newly manufactured, economically operational aircraft that were added to the fleet in the past few years, and to the dramatic decrease in fuel prices.

He also pointed out that the decline in revenues in the first half of 2009 came as a result of the 6% decrease in the number of passengers aboard RJ aircraft and in the uplifted cargo, which went down by 33%. Majali said that as a result of the lower fuel prices and the competition in the region, the airline reduced ticket fares leading to a decline in passenger yield by 9% and cargo yield by 10%.

He added that most of the company's operational indicators saw a drop during the aforementioned period, when the seat factor went down to 65 points this year, compared to the same period last year, which saw 71 points.

Majali said that the aviation sector, in general, and RJ, in particular, is facing big challenges, represented by sharp competition among the regional airlines and an increased number of aircraft seats, which is bound to result in lower ticket prices and therefore impact the company revenues.

However, he expressed optimism that RJ will achieve positive results at the end of the year and stressed that it is continuing its marketing efforts to attract more passengers at a time the company is witnessing a remarkable growth of passenger traffic on all its sectors this summer.

This year RJ added two new routes to its network; to Brussels and Benghazi. It also increased the frequency of daily flights to many of its regional destinations, like Beirut, Dubai, Abu Dhabi, Cairo, Jeddah, Aleppo and others.

Source: Press Release (Royal Jordanian)