RJ Board of Directors sets the company's budget for 2006

The board predicted RJ revenues for 2006 to reach JD469 million, while the revenues expected by the end of 2005 are of JD389 million. This increase in revenues is attributed to the annual growth in operations due to the growing demand to travel on board RJ's fleet which has just acquired highly advanced aircraft, with more to come. Moreover, Royal Wings' network is transferred to Royal Jordanian to operate, thus contributing to the overall revenues.

The budget figures indicate that the company's expenses will rise from JD377 million in 2005 to JD455 million in 2006. This is due to the projected expansion in operations and the steep surge in fuel prices this year, which will, as a consequence, affect the results of 2006.

According to budget estimates, 2005 will end with RJ posting net profits in spite of the 100% rise in fuel prices. The net profits are expected to be similar to those of 2004, reaching JD17.5 million. The budget also projected that the net profits for 2006 will be about the same amount, with a return of 21.5% on the company's capital and 14.3% on the shares of the only shareholder - the Jordanian government.

The fuel bill in the budget reaches JD141 million in 2006, against JD103 million in 2005, marking an increase of 37%, assuming the prices remain stable during the coming year, at around $57 a barrel. The company will pay a difference of JD22 million because of this increase in fuel prices, and will pay the remaining JD16 million to attain operational growth.

Operationally, the coming year will witness several positive developments, as RJ's daily flights will mark an increase of 35%. Non-stop flights will be operating to most destinations in the Arab Gulf and European countries, and there will be more frequent daily and weekly flights to some destinations starting with the summer of 2006. There will be three daily flights to Beirut, two to Aqaba, Cairo and Baghdad, one daily flight to Damascus, Aleppo, London, Kuwait, and Sharm El Sheikh, marking an obvious increase in the airline's operations. There will also be nine weekly flights to Dubai and 12 weekly flights to the United States.

Royal Jordanian will have carried 1,742,000 passengers till the end of 2005; it carried 1,660,000 passengers last year. The seat factor was 71.6% this year, compared to last year's 72.3%.

Due to the sizeable increase in revenues, operations and the size of the fleet during 2006, each RJ employee will be serving 586 passengers in 2006, up from 494 served in 2005. This comes in line with RJ's policy to maintain cost control and improve the performance of its employees.

Royal Jordanian executes its five-year strategy (2004-2008) focusing on fleet modernization. This involves replacing the current A310 and A320 with newly manufactured A320 and A321 aircraft, and assimilating ten modern regional jets into the fleet. The airline is thus bolstering its regional network and increasing the frequency of daily flights to major and secondary cities on the regional routes. In the coming three years RJ fleet will have around 35 aircraft.

The airline's strategic plan also concentrates on reassessing and expanding the route network through code sharing with international air carriers and on reaching full membership in the oneworld airline alliance in the second half of 2006. In October 2005, Royal Jordanian was the first regional and Arab airline to be invited to join any of the three global airline alliances. Other plans involve investment in human resources and IT system modernization, and improved air and ground services offered passengers.