Royal Jordanian Airlines: narrowbody fleet renewal, market share down
Royal Jordanian is preparing to embark on a major narrowbody fleet renewal project aimed at improving the airline’s efficiency and inflight product. The airline has been evaluating the A220, A320neo, 737 MAX and E190-E2 families, and plans to place an order within the next couple of months for 22 new generation narrowbody aircraft for delivery from 2020 to 2025.
Royal Jordanian only plans to grow capacity by 18% over the next five years with virtually all the growth occurring in the short and medium haul segments as the airline is not intending to expand its widebody fleet beyond the current seven 787-8s. Growth of less than 4% per annum will result in further market share declines for Royal Jordanian, which has already experienced a more than 20ppt drop in market share over the past decade.
The airline is focused on improving its profitability rather than expansion – a sensible strategy, given the intensifying competition in its home market due to rapid expansion from LCCs and Gulf airlines. Royal Jordanian has been increasing its reliance on sixth freedom transit traffic, particularly to/from the Levant region, as it is difficult competing against LCCs for local traffic to/from Jordan.
Royal Jordanian has also been working to reduce its costs and improve its efficiency. The new, more fuel efficient, narrowbody fleet will further support these efforts and will support ongoing efforts to increase yields as its product will improve.
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