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Royal Jordanian Begins Turnaround With First Profit in Months – But Annual Results Aren’t So Promising

Royal Jordanian Begins Turnaround With First Profit in Months – But Annual Results Aren’t So Promising

Royal Jordanian Begins Turnaround With First Profit in Months - But Annual Results Aren't So Promising

Royal Jordanian has just released its half yearly results up to the end of June and signs of a turnaround at the beleaguered carrier are looking promising.  The national carrier of Kingdom of Jordan recorded a profit in June of $2.1 million USD (1.5 million Dinar) compared to a net loss of $2.9 million USD (2.1 million Dinar) in the same month last year.

Unfortunately, the airline’s other results aren’t quite so good.  For the first six months of the year, the carrier reported a net loss of $36 million USD (26.3 million Dinar).  Royal Jordanian blamed a decline in its average fares along with what it called “seasonality” for the losses.

The news comes as the airline launches its first ever global fare sale.  Special promotional fares are available up to March 15, 2018, on purchases made up to August 12th.  Royal Jordanian has launched the sale in response to complaints about the airline’s pricing policy and as an attempt to increase its seat load factor.

At present, the airline has a woefully low load factor of just 64%  – although even that is an improvement on the same period last year when the load factor was hovering just above 60%.

Royal Jordanian’s new President and chief executive, Stefan Pichler said of the results: “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.”

He continued: “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.”

In fact, Royal Jordanian managed to record a profit in June despite fuel bills increasing by a huge 27%.  Nonetheless, Pichler knows there’s a lot more work to do to keep the turnaround going: “We have a lot of homework to do to transform RJ into a sustainably 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.”

And while June was positive for Royal Jordanian, the future looks set to be tough.  The airline is concerned about what it calls “tough competition” in the Gulf region.  That competition has forced the carrier to drop ticket fares and revenues to fall by 1% – despite passenger numbers increasing by 6%.

 

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