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RJ registers JD5 million net profit; a record in passenger numbers in July

Aug - Amman


RJ President/CEO Hussein Dabbas said that the passenger number is the highest registered by the company in one month since its establishment 48 years ago.

The seat factor went up to 81% last July from 79% in July 2010. As a result, RJ made a net profit of JD5 million in July 2011. Dabbas noted that the company’s operational revenues in July 2010 were JD70.3 million; they went up to JD78.5 million in July this year, marking an 11.6% growth.

However, the operational costs increased by 22.7% due to the surge in the fuel bill, which reduced the profit in the mentioned period despite the increase in the number of passengers. The RJ president pointed out that the company fuel bill amounted to JD30.5 million in July this year, compared to JD20.2million in the same month of 2010, marking a 51% increase.

The fuel bill constitutes around 40% of the overall operational costs incurred by the airline last month, which reached JD76 million. According to Dabbas, other operational indicators also saw a remarkable growth last month: the flight frequencies went up by 9.8%, from 3,668 flights in July 2010 to 4,026 flights last month. The flying hours also increased by 7%, from 10,649 in July 2010 to 11,394 in July 2011.

The employees in the Kingdom and the 59 outstations doubled their efforts this summer season to revive traffic, increase the load factor and offer passengers superior ground and air services to overcome the negative outcome of the first six months of 2011.

The first half of this year saw a regression in the travel demand because of the political turmoil taking place in the region and the surge in oil prices, which led to great losses to worldwide airlines. Dabbas expressed hope that travel to and from Jordan will pick up this August and September, as well as during the remaining months of the year. RJ, the oneworld carrier, and the Jordan Tourism Board are cooperating to attract more tourist groups from all over the world to the Kingdom, which is going to benefit all parties working in the tourism sector. In the first half of 2011, Royal Jordanian faced big challenges resulting from the steep rise in oil prices and the political events that are still going on in many of the region’s countries.

The fuel expenses for the first six months of this year reached JD135 million, against JD93 million and JD63 million paid in the same period in 2010 and 2009 respectively.

The political turmoil in the Arab region led RJ to cancel 677 round-trip flights and to combine others in view of the regression in travel and tourism demand, particularly from Europe. In addition, operations to Tripoli and Benghazi, Libya, were halted and traffic to and from destinations in Egypt, Yemen, Syria, Bahrain, Tunis and others were negatively affected. Many regional and international airlines incurred great losses in the first half of the year as well, due to the high fuel prices.

The International Air Transport Association revisited the forecast for the airline industry profits in 2011; in March they were brought down to $8.6 billion from $9.1 billion, and in June to $4 billion from $18 billion in June of 2010.

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