Royal Jordanian posts $10.8m net for first half 2009

Royal Jordanian has posted net profits of around JD7.7 million ($10.8m), compared to a JD4m ($5.6m) net loss incurred during the same period of last year. The gross profit reached around JD19m ($26.8m), against an operational loss of around JD3m ($4.23m) for the comparison period.  

Chairman Nasser 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.  Revenues were down 12.7% to JD274m, from JD314m.

Samer Majali, CEO, said the profits came as a result cost cutting in operational expenses.  He said the company saved 19.6% in the first six months of this year, exceeding the decline in revenues. He added that 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 and economical aircraft that were added to the fleet in the past few years, and to the dramatic decrease in fuel prices.
     
He 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 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, are 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 and that at this 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, 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.