RJ's general assembly holds its ordinary and extraordinary meetings

Attending were RJ President/CEO Samer Majali, members of the board of directors, Ernst and Young auditors of RJ accounts, the companies' general comptroller and a number of shareholders owning 64 % of the company capital, which amounts to 84.3m shares/JDs.

The speech of the chairman of the Board of Directors Nasser Lozi was distributed to the shareholders and included a review about the most notable achievements of 2008.

It noticed that RJ's performance in all operational aspects improved in 2008 despite the major challenges which it successfully overcame during the year.

Among the challenges, there were massive, unprecedented rises in jet fuel prices, in addition to the drop in the demand on travel in the last quarter of last year, as a result of the global economic crisis and the events in Thailand and India.

In his speech, Lozi had also said that the company's operating revenues went up to around JD703m, an increase of 29% over 2007. This was achieved as a result of the rise in the number of passengers, which amounted to 2.701m, marking an increase of 14.1% over 2007.

Yield per passenger also rose by 11% due to the rise in ticket prices, which followed the increase in fuel prices during 2008. RJ's fuel bill reached around JD285m in 2008, compared to JD165m in 2007.

He pointed out that in keeping with the best international airline practices, the company resorted to fuel hedging deals in order to protect the airline's financial position and protect it against fluctuation in the bottom line.

RJ hedged 35% of the fuel forecast for consumption in 2008 and 2009 at an average price of $105 per barrel, at a time when the price was $100 to $150 per barrel. All indications at the time were that the prices would continue to rise, to reach around $170-$200 per barrel.

Lozi's speech stressed that the price variations in fuel purchases in 2008 were absorbed, and the company realised a net profit of JD18.7m before tax.

It added that due to the rapid and unexpected decline in oil prices - reaching as low as $45 a barrel by the end of 2008 - this year's fuel hedging contracts were revaluated and unrealized losses of around JD46.7m were recorded.

According to Lozi, the company, being consistent in its accounting policies and in conformity with the International Accounting Standards requirements, reflected these losses on the 2008 results. As such, the net losses of 2008 after tax, that the company announced, amounted to JD23.4m.

He emphasized that the company's operational results during 2008 were consistent with the growing indicators of operational performance during the past four years.

However, during these four years, the airline logged net profits despite the various challenges and obstacles it faced in the region, like wars and unstable conditions in Iraq, Palestine and Lebanon.

All these and other events had a negative impact on air traffic and the performance of Royal Jordanian.

At the end of his speech, Lozi expressed appreciation for the shareholders' support and confidence in the leading national company, and conviction that a prosperous future lies ahead for Royal Jordanian.

RJ's clear mission, huge potential and efficient human and technological resources have secured it a very good reputation and placed it among the best world airlines.

RJ president/CEO Samer Majali said that the global economic crisis shall directly affect the performance of the international air transport industry in 2009 and see a decrease in the volumes of passenger traffic and cargo.

Nevertheless, the airline took a number of measures to reduce the impact of this crisis on the company's performance, among which endeavoring to increase the number of passengers, opening new, promising markets and intensifying marketing activities on its network.

Moreover, RJ took strict measures to control current and capital costs without affecting the quality of services provided passengers. In addition, Majali said that in the first quarter of this year the company launched a marketing plan to motivate passengers to buy tickets at very reasonable prices during winter in order to travel in the summer.

And the airline is continuing to promote its services worldwide.

He pointed out that the operational results of the company in the first quartet of this year are related to the repercussions of the crisis and the events in the Gaza Strip.

The number of passengers carried by RJ is about 10% smaller than the same period of 2008. He expects that the summer season will see a growth in the number of passengers, compensating the decline in the first quarter of this year.

In response to the shareholders questions, Majali said that RJ is a respectable, scheduled air carrier, and enjoys an international reputation. It has always been keen on maintaining customer satisfaction and on offering easier travel and more options, and that was made especially easy through its membership in the oneworld airline alliance, since April 2007.

He also said that RJ will continue to carry out its strategic plans, foremost among which being increasing the number of passengers and the revenues, in addition to boosting its financial position.

It endeavors to achieve these plans by improving air and ground services, enhancing connectivity, and modernizing the information systems in the human resources, cargo, procurement and maintenance departments, and completing the fleet modernization plan.

At the same time, several phases of the project to build new headquarters in Amman are now complete.

After that, the general assembly approved the Board of Directors' financial report for 2008, its future plans and the financial statements. It also discharged the Board of Directors and chose Ernst and Young Company as RJ's accounts auditor for 2009.

It also approved the recommendation of the board of directors to appoint Samer Anis Muasher as member of the board.

Immediately after the ordinary meeting, the general assembly held its extraordinary meeting to amend paragraph 7 of Article (38) of the articles of association related to the general assembly's authorities, in regard to borrowing or mortgaging, if the total value of loans and mortgages are to exceed the company's subscribed capital.

After amendments, it stipulates the terms for borrowing if the total value of the loan exceeds 150% of the company's subscribed capital. The paragraph was modified in light of the company's expansions.

The amended version gives the company more flexibility to fund its capital projects, achieving further growth of all operational performance indicators and improving the services offered passengers.