Royal Jordanian shows $10 mn profit

The results show that in 2006, RJ posted net profits of JD7.4 million ($10 million) before deducting the taxes and staff incentives. The profits represent 10 percent of the capital. Chairman of the Board of Directors Nasser Lozi said that revenues rose from JD413 million in 2005 to JD447 million in 2006, an increase of 8% over 2005.

The gross profit reached JD13 million. Lozi pointed out that the results come in light of several strategic investments the airline has been executing in the field of information technology, and financial and administrative systems, in addition to investment in human resources.

The government is expected to soon announce the completion of the privatization program, which involves selling 74% of the company shares to the private sector and keeping 51% of the shares for Jordanians.

President/CEO Samer Majali said that RJ aircraft carried almost 2 million passengers in 2006, posting an increase of 13% over the number of passengers transported in 2005 - 1, 7 million passengers. The seat factor reached 67%; flying hours went up by 12%, to reach 77,000 hours, and mileage by 12.3%, to reach around 4.6 million kilometers.

Majali expressed RJ’s satisfaction with the results; however, although they were expected to be higher, the figures show that the events of 2006 had a negative impact on tourism in the region, with hundreds of tourist groups reluctant to visit because of the situation in the region.

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He also pointed out the big challenges the company faced last year, the most significant being the steep rise in fuel prices regionally and internationally. The budgeted fuel cost increased by JD40 million, most of it because of the increase in fuel prices, unmatched by an increase in ticket prices, as the airline was keen on easing travel expenses on passengers.

Majali said that the operational results of the first quarter of this year demonstrate a notable growth in the number of passengers; they increased from 421,000 in 2006 to 474,000 in 2007, marking an increase of 13%. The seat factor also grew by 10% over the same period last year.

Majali underlined the major efforts RJ is exerting to upgrade its air and ground services to boost its competitiveness and increase the number of its customers. The airline has added new aircraft to its fleet to satisfy the passengers’ need of comfort and entertainment onboard, in addition to having teams dedicated to constantly modernizing the IT systems used by the company. Joining the oneworld global airline alliance in April 1 this year and its contributing to the expansion of RJ network from 53 to 700 destinations in the world is a key factor in bolstering the airline’s standing.
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