RJ turns a profit for 2009

Royal Jordanian has achieved net profits of JD25.5 million (US$36 million) for the first nine months of 2009.

The financial results are a significant improvement on the JD3.8 million losses ($5.4 million incurred during the same period last year.

Despite the positive results, the airlines operating revenues went down by 16%, from JD532 million ($750,000,000) in the first nine months of 2008 to JD449 million ($633,000,000) for the same period of 2009.

The carrier’s board of directors chaired by Nasser Lozi said that the drop in revenues stemmed from the challenges that the international air transport industry had been facing and the slump in passenger traffic due to the global economic crisis.

He added that RJ had used a successful cost-control policy to cut the operational expenditures without affecting the level of air and ground services offered to passengers.

RJ president and CEO Hussein Dabbas pointed out that the profits came as a result of the decrease in fuel expenses in the past nine months. The airline halved its fuel bill from January 1 to October 31, 2009 when compared to the same period in 2008. In addition, he said that the airline had reduced operational costs by 20% and the available seat kilometers (ASKs) by 4% during this period.

The drop in revenues was due to the 3% decrease in the number of passengers using RJ aircraft and the 32% drop in uplifted cargo.

Due to fierce competition in the region throughout 2009, RJ was forced to reduce its ticket fares, leading to a 14% drop in passenger yield; the drop was from JD216 ($304) in the first nine months of 2008 to JD185 ($261) in the comparison period this year.

The decline in passenger traffic led to a drop in the key performance indicators during the above-mentioned period, Dabbas said.

“The seat factor went down by 8% to reach 67 points this year, compared to the same period last year, which witnessed 73 points. The load factor also went down from 55 points to 49 points, marking an 11% drop. However, the number of departures rose by 5% and of flying hours by 4%, due to the modifications to available seat kilometers.”

The CEO added that the airline plans to enter new markets to boost its presence regionally and internationally.