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Royal Jordanian holds ordinary annual general meeting

Apr 29, 2019


Amman, April 28, 2019 -- Royal Jordanian's General Assembly held its ordinary meeting, presided by RJ Board of Directors Chairman Said Darwazeh, on April 28 at Sheraton Hotel, Amman.

 

Attending were Board of Directors members, RJ President/CEO Stefan Pichler, the representative of the companies’ general controller, RJ accounts auditors Ernst and Young and some shareholders; the latter, in their entirety, own 93% of the company capital, which amounts to 274.6 million shares.

The meeting discussed the board’s report on the 2018 financial results and the business perspectives for 2019, in addition to the auditors’ report, the budget, profits and losses. The General Assembly agreed to all the articles under discussion.

In his speech, which was distributed to the shareholders, Darwazeh said that the audited financial results of 2018 showed a noticeable improvement in the operational and financial KPIs, including increased revenues, gross profit, operating profit, passenger numbers, load factor, uplifted cargo, ancillary revenue and others.

He added that the operating revenues in 2018 went up by 8%, to reach JD653.3 million, which was JD47.5 million higher than the JD605.8 million in 2017.

 

He mentioned that the increase in revenue was the result of a 4% growth in the number of passengers, from 3.1 million in 2017 to 3.3 million in 2018, which increased the load factor by 4%, from 71.2% in 2017 to 73.8% in 2018.

 

Darwazeh stressed that the high KPIs are attributed to the efforts of all company employees, management and staff, who worked as one team, keen to provide the best services to travelers, in addition to RJ’s new approach to marketing and sales promotions that encouraged travelers to fly RJ last year and that will continue during 2019.

 

He pointed out that RJ’s net profits would have been higher if it had not been for the increase in fuel prices, which raised the total operational costs from JD527 million in 2017 to JD563 million in 2018, a significant 7% increase.

 

He said that RJ paid JD38 million, or 31%, more for fuel in 2018 (JD159.3 million) than in 2017, when it paid JD121.5 million. The fuel cost constitutes 28% of the total operating cost.

 

RJ President/CEO Stefan Pichler made a presentation to the shareholders, and said that despite the rising fuel costs, Royal Jordanian had an enhanced operating performance, registering a net operating profit of JD19 million, an increase of 47% over 2017, due to the JD47.5 million growth in revenues, a higher load factor and passenger numbers, cargo revenue, ancillary revenue and others.

 

He said that cargo sales also improved significantly; the company sold 55% of the capacity offered for cargo on passenger aircraft, which resulted in JD45.6 million cargo revenues, a 12% increase over 2017.

 

Pichler added that RJ continued to enhance its digital capabilities, effecting 27% more online sales, of a JD77.8 million value, and obtaining 29% more ancillary revenues, or JD18.6 million. 

 

Regarding the end-of-year financial results, Pichler said that RJ achieved a 14% increase in the gross profit in 2018, when it made JD90.4 million against JD79.5 million in 2017. However, the company recorded a net loss of JD5.9 million in 2018, while it achieved JD274,000 in net profits in 2017, due to the losses incurred from the operations of Royal Wings and the difference in exchange rates, mainly of the Sudanese pound.

He said that the decreased exchange rate of the Sundanese pound made RJ lose JD4.2 million, and the Royal Wings losses made RJ incur JD3.9 million losses. RJ halted its operation to Sudan at the beginning of March 2019. It also suspended the Royal Wings operation at the end of November 2018.

Pichler said that Royal Jordanian was able to improve its unit revenues by 5% against last year, and fleet utilization from 11.4 hours/day per aircraft in 2017 to 12.1 hours/day per aircraft in 2018, a 6 % growth.

He added that RJ’s unit cost, excluding fuel, was 4% below 2017. Overall, RJ employee productivity went up by 7% over 2017.

Pichler thanked all RJ employees for their efforts enhancing efficiency and productivity.

During the AGM, Darwazeh and Pichler responded to shareholders’ questions about the airline’s performance and plans.

 

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