Jordan to privatise aviation support services

Jordan Aircraft Maintenance Ltd. (JorAMCo) and Jordan Airmotive Ltd. (JALCo) are to be divested through Jordan's Executive Privatisation Commission (EPC) through an international competitive sale.

JorAMCo, which provides comprehensive aircraft maintenance services, and JALCo, which repairs and overhauls aircraft engines, originally both served as RJ's engineering component and became government-owned private concerns when the airline was restructured. The Government's intention is to sell all the shares of the companies to the private sector, with the possibility of allocating 20 per cent of the government's stake in each to RJ in order to maintain ties to the carrier.

"The sale of the two companies will pave the way for bigger private sector involvement in the development of Jordan's aviation sector.," said Eng. Abdel Rahman El-Khatib, the EPC's Aviation Sector Director. "Jordan has been committed to the divestment process for many years now and this latest move within a strategic sector clearly reflects the momentum of the privatisation drive in the country," he added.

The decision to restructure Royal Jordanian Airlines was taken in 1999 following which the airline's not core activities including JALCo and JorAMCo were turned over to the Royal Jordanian Investments Company in preparation for privatisation, while the core aviation business was registered in February 2001 as a public shareholding company.

Both companies have well established client bases in the Middle East, Asia, America, Europe and Africa, and they have won certification from major international civil aviation authorities that include the Jordan Civil Aviation Authority, the US Federal Aviation Administration (FAA) and Europe's Joint Aviation Authorities (JAA).

They function in special free zones at the Queen Alia International Airport, giving them tax exemptions and other privileges. Despite a 24-month downturn in the global aviation industry, both companies have maintained consistently healthy revenues and steady profits creating a very attractive investment opportunity.

As part of Jordan's aviation overhaul, Airport Duty Free Shops (ADFS) was sold to the Spanish group Aldeasa, and 80 per cent of the shares in Jordan Flight Catering Company (JFCC) were sold to the British Alpha Group and local investors. Royal Jordanian retained a 20 per cent stake in JFCC.

The Executive Privatisation Commission is the governmental body tasked with the overseeing Jordan's privatisation programme. It functions independently and is affiliated to the Jordan Privatisation Council, headed by the Prime Minister.

Jordan's privatisation effort has been hailed as one of the most successful in the region with the growing contribution of the private sector to GDP attributed to the divestment process. The private sector's share of GDP has risen from 60 per cent in 1997 to 67 per cent in 2001.