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Royal Jordanian reduces losses by 64% in Q1, 2015

The net loss of the first quarter of 2015 reached JD8.3 million.

The net loss of Royal Jordanian went down by 64% in the first three months of this year, compared to the same period last year.

The net loss of the first quarter of 2015 reached JD8.3 million, against JD23 million incurred by the company in the same months of 2014.

Chairman of the Board of Directors Suleiman Al Hafez said that the airlines’ financial results are seasonal in nature and they do not follow the same pattern throughout the year.

He pointed out that air transport normally sees a remarkable decrease in the first and fourth quarter of the year, while it gets vibrant in the second quarter. The third quarter is usually and consistently peak time due to the holiday season which increases demand on international and regional tourism.
Hafez expressed the company’s satisfaction with the performance during this first quarter, which holds promise of positive results by the end of 2015.

He attributed the drop in losses to lower oil prices and effective airline operations, due to a strategy that aims to increase revenues, cut costs wherever possible, without affecting the level of safety or the services offered passengers.

Hafez also said that the restructuring plan the company began to implement toward the end of 2014 included shutting down eight destinations and phasing out some aircraft, which coincided with the introduction of five new Boeing 787s that consume 20% less fuel than similarly sized aircraft.
The company also renegotiated all agreements with service providers and implemented effective initiatives to reduce expenses, which led to a drop in the company’s operating cost from JD178 million during the first quarter of 2014 to JD139 million in the same period of 2015, a 22% drop that resulted in a gross profit of JD9.5 million.

Hafez said that all RJ employees, in collaboration with the executive management work efficiently as one team to improve the company’s finances and reduce cost, in parallel with improving ground and air services.

He also stressed the company’s determination to overcome challenges through implementing the strategic plan prepared by the board of directors for the period 2015-2019. The plan is bound to increase revenues to the maximum using the offered capacity, to boost non-operational revenues and work on the activities that yield the highest and fastest growing revenues.