RJ achieves JD315m in operational revenues

The results show that RJ incurred net losses of around JD3.1m, against JD1.9m during the same period of last year. The results were much better than the losses estimated in the budget for the first half of 2008 despite the soaring jet fuel prices that the company had to pay for this year.

Lozi praised the efforts extended by the company's management this year to increase the number of passengers and the company revenues, and to reduce the effect of the unprecedentedly high fuel prices. The company, he said, managed this big challenge with professionalism, following a clear strategy that focuses on attracting new passengers, and following fuel-hedging policies and procedures to control costs.

President/CEO Samer Majali said that Royal Jordanian's operational revenues grew up by 33% in the first half of 2008, compared to the same period in 2007. The airline registered JD315m this year against JD236m in the same period last year. Thus the revenues exceeded the estimates set for this time of the year.

This record increase in revenues resulted from an increased number of passengers, by 21%, from 1 million passengers in the first six months of 2007 to 1,225,000 passengers this year. The company's commendable efforts to market sales, improve product and offer distinguished onboard services led to these good results, said Majali.

He added that the seat factor rose by 5%, to reach 71%. The big growth in the number passengers came despite the fact that demand on travel in the first six months is usually less than that in the second half of the year, particularly during the summer season. The airline expects to see unprecedentedly big numbers of passengers this summer.

Majali also said that the uplifted cargo grew by 21% in comparison to last year's first half. Therefore, freight revenues rose from JD17m in the first half of 2007 to JD21m in 2008.

The operational expenses of the company increased from JD230m in the first six months of 2007 to JD316m in the first six months of this year, marking an increase of 37%, due to the high rise in jet fuel costs, which amounted to JD131m, against JD68m in the corresponding period of 2007, marking a 91% increase. The flying hours rose by 18% only.

The RJ president said that jet fuel now makes up 42% of the operational costs, against 30% during the same period last year. This percentage underscores the enormous challenges the company faces because of the high fuel prices. The other operational costs did not see a remarkable increase, particularly that the available seat kilometers (ASKs) are proportionate to the volume of operations.

Majali stressed that since the beginning of this year, the company has followed the policy of fuel purchase hedging, agreeing to purchase 30% of the expected amount of consumed fuel in 2008 and 2009. This policy is bound to boost the financial status of the company and improve the financial results.

Moreover, the airline joined efforts with the International Air Transport Association (IATA) to take some technical steps bound to reduce fuel consumption, reviewing the weight carried on board and flying shorter routes when possible.

In addition, the airline assets went up to JD394m last June, from JD326m at the end of 2007, marking a 21% increase; the company became the owner of two Embraer 175 aircraft in May and June this year, out of four aircraft it contracted to introduce earlier on capital lease basis under easy conditions. The first batch of aircraft was introduced in 2007.

The company registered net profits of about JD20.3m in 2007 despite of the loss it incurred in the first half of the same year, which amounted to JD1.9m, in light of the big rise in the number of passengers, the growth in return on sales, and the improvement of services level.

The RJ president mentioned that there is a great demand on travel to all the airline's destinations in the summer months. He also underlined the company's keenness to offer passengers best services in the air and on the ground, and to facilitate their travel.

He called upon the passengers to visit the website of the company to benefit from the facilities offered them, such as online booking, offers and ticket fares, flight schedules and other information related to traveling.

Royal Jordanian serves a route network of 55 destinations directly from Amman and more than 700 destinations through its membership in the oneworld airline alliance, which brings together ten giant air carriers: American Airlines, British Airways, Cathay Pacific, Finnair, Japan Airlines, LAN, Hungarian Malev, Qantas, Iberia and Royal Jordanian.

The airline operates a fleet of 27 aircraft of different modern types.