Amman, during a meeting convened by Mr. Nasser Lozi, the Board of Directors of Royal Jordanian announced the results for the company’s operations during the first half of year 2008. These results underline the net losses that the company has made and which reach around JD 1.3 million.

These results underline the net losses that the company has made and which reach around JD 1.3 million. That compared with the losses of JD 1.9 million at the same time in year 2007. These results are much better than the expected losses in the intern budget during the first half of year 2008 despite the great increase in fuel prices.

Mr. Lozi referred to the efforts made by the management of the company to increase the number of clients and the company’s revenue for this year. He also pointed out to the huge efforts made to decrease the negative effects of the rocketing fuel prices, deal with this challenge with the highest level of professionalism through following a clear and precise strategy that focuses on attracting more travelers, and entering operations for hedge purchasing of fuel and following different procedures to control expenditures.

Eng. Samer Al Majali, the President, Vice Chairman and CEO of Royal Jordanian stated that the operational revenue for the company increased from JD 326 million in the first half of year 2007 to JD 315 million in the first half of year 2008, which amount to a 33% increase, thus exceeding the revenue that was estimated in the budget for this same period of time.

He also added that this record breaking increase in revenue is the result of a great increase in the number of travelers from one million in the first six months of year 2007 to 1.225 million during the first six months of year 2008. This 21% increase in the number of travelers came as a result of the company’s improvement in the marketing arena, upgrading its services which are presented in the travel market and adding new services during flights.

Al Majali also stated that the rate of seat occupancy increased by 5% to reach 71%. This marked increase in the number of travelers was achieved despite the fact that the travel market slows down during the first half of the year.

He also added that the number of shipments have also increased by 21%. The shipment revenue has increased from JD 17 million in the first half of year 2007 to JD 21 million in the first half of year 2008.

He said that the operational expenses of the company in the first half of year 2008 totaled JD 316 million, a 37% increase from JD 316 million at the same time in year 2007. This increase is a result of the rocketing fuel prices which summed up to JD 131 million, a 91% increase from JD 68 million in year 2007. This boost in fuel prices was accompanied by an 18% increase in aviation hours.

The fuel expenses formed 42% of the operational expenses in comparison to only 30% at the same time in year 2007. This indicates the huge challenges the company suffered from as a results of the increase in fuel prices, internationally and locally. The remaining operational expenses did not witness an increase.

In the light of fluctuating fuel prices, Al Majali stated that the company his entered deals of hedge purchasing of fuel to avoid future risks. Deals have been made to purchase about 30% of the amounts that are expected to be consumed during years 2008 and 2009. This is supposed to contribute to enhancing the financial status of the company and limit the fluctuation of its results. The company is also currently collaborating with the International Air & Shipping Association (IASA) on implementing an initiative to limit the consumption of fuel through relooking the carried weights on each flight and using shorter aviation routes.

On the other hand, the company’s assets totaled JD 394 million by the end of last June, a 21% increase from the JD 326 million at the end of year 2007. This increase came as a result of the addition of two Embraer 175 planes to Royal Jordanian’s fleet during the months May and June of year 2008. There are two more planes that are expected be received by Royal Jordanian as part of a financial leasing deal.

Source: Press Release (Royal Jordanian)