Royal Jordanian shows first progress in turnaround with JD1.5 million net profit for June after cumu

28-Jul-2017

Royal Jordanian's Board of Directors approved the reviewed financial results for the first six months of this year during its session held on July 29, 2017. The results showed the company registered a net loss of JD26.3 million, driven by seasonality and a decline in the average fare.

The airline also achieved a net profit of JD1.5 million during the month of June, compared to a JD2.1 million net loss in the same month of 2016.

June's net profit was logged despite the 27 per cent increase in the fuel bill paid by the company for this month, from JD8.3 million in June 2016 to JD10.5 million in June this year.

The seat load factor increased by 3.9 points to 64.1 per cent in June 2017, against 60.2 per cent for June 2016. RJ transported 253,000 passengers onboard its planes during this month compared to 224,000 passengers in June last year, a 13 per cent increase.

Commenting on the results, RJ's President/CEO Stefan Pichler expressed satisfaction with the net profit recorded in June, which the company sees as a start into the turnaround.

"We have a lot of homework to do to transform RJ into a sustainable profitable company for our shareholders, a consumer champion for all our guests and an employer of choice for all people in Jordan. While we are working on our strategic turnaround plan, we now focus on early wins in the commercial area, like load factor and yield improvement" he said.

Pichler added: "June worked out pretty well and I am confident that we will make up for the severe losses suffered in the first 5 months of operations in 2017. The current big global sale so far is an overwhelming success and will help us with a good start into the low season of this year. "

Pichler added that the first half results were affected by the significant drop in ticket fares due to tough competition in the Gulf region; the revenues went down by 1 per cent although the number of passengers increased in this period by 6 per cent and the seat load factor by 6 points, going up from 62 per cent in the first half of last year to 68 per cent this year.

The total operating costs increased by 3 per cent, due to the 15 per cent increase in the fuel bill paid by the company during that period. Despite the increase in the fuel cost, the ticket prices did not go up as there was overcapacity in the whole airline industry.