Royal Jordanian to go private

Royal Jordanian, CEO Samer Majali said that Royal Jordanian will primarily be owned by the private sector and government by the end of next year. “The drive to privatize and restructure, several phases of which have already been implemented, saw the company register, on Feb. 5, 2001, under the name of ‘Alia’, the Royal Jordanian Airline Public Shareholding Company, with a capital of JD40 million. The capital rose to today’s JD72.5 million, “said Majali.

He indicated that in light of the positive developments in the last few years, the government decided to forge ahead with the privatization process. It is planning to sell 74% of the company shares, retaining 26% during this phase, transferring RJ ownership from the public to the private sector. The shares to be sold to non-Jordanian investors should not exceed 49%, with Jordanian shares not less than 51%.

“Presently, the government is considering several offers to select and appoint a lead financial, technical and legal consultant that will prepare a comprehensive report on the best way of privatizing Royal Jordanian and appraising its transport rights, fleet, manpower, offices and others assets. Offers came from experts and huge international banks specializing in the field. The chosen party will be announced soon, depending on its technical and legal proficiency and the international experience in the domain,” he added.

Majali said that due to the increase in operational costs, most significantly the fuel prices, the airline does not expect the final financial results to be as good as those of the past two years. Fuel prices grew up from $144 million in 2005 to $196 million in 2006. He commented, “however, we are optimistic that in the coming year we will attain better results, particularly after concluding the medium-haul fleet modernization and commencing to incorporate the EMBRAER 195s in the fleet. Moreover, officially joining oneworld airline alliance early in 2007, and having covered good mileage in the privatization process make us positive about success next year.”

He also announced that RJ estimates to have around 2 million passengers fly RJ by the end of this year, marking an 8% average increase, the revenues increased by 9.5%, flying hours 12% and departures with 23%. The airline expects to attain revenues of $637 million in 2006.

ADVERTISEMENT

At the press conference, Majali cited some of the most significant changes RJ made in 2006 in order to make its new campaign “Change is in the Air” into reality. He said that the company implemented several systems to make travel easier and simpler for passengers, among which are the e-ticketing, the electronic booking engine and the self check in systems. RJ introduced a new website recently, and opened a 24/7 advanced Call Centre to handle all customers’ inquiries and services from all over the world, including reservation, ticketing, frequent flyer program and baggage. Additionally, it made huge improvements in its in-flight services, including the menu on board, the entertainment system with seat back video screens for every Crown and Economy class passenger and new cabin interior (curtain fabrics, floor carpets, blankets, cushions and seats).

In line with the growth of travel, Majali said that RJ is planning to open two new destinations to Montreal and Budapest next June. The new stations will add up the airline’s points to 54. Moreover, the airline intends to incorporate modern medium-haul aircraft of the type Airbus A319 in 2008 and 2009. It will also modernize its long-haul fleet by replacing its Airbus A340 and A310 aircraft with new Airbus A350s or Boeing 787s in 2010.

On Dec. 15, Royal Jordanian will celebrate its 43rd anniversary having been established in 1963. The airline currently employs around 3,600 workers. It operates a fleet of 24 aircraft covering 52 destinations on four continents.
——-