Royal Jordanian general assembly held its annual ordinary and extraordinary sessions on April 25, 2011, at Le Meridian hotel, Amman, headed by Chairman of the Board of Directors Nasser Lozi.

Attending were members of the board of directors, RJ President/CEO Hussein Dabbas, the companies’ general comptroller, Ernst and Young auditors of RJ accounts, and a number of shareholders owning 59.4% of the company capital, which amounts to 84.3 million shares/dinars.

Nasser Lozi’s speech, distributed to the shareholders, included a review of the most notable achievements of 2010. It noticed that RJ’s performance in all operational aspects improved despite the major challenges it successfully overcame during the year, among which, the effects of the global economic crisis and the rise in jet fuel prices. Those hurdles significantly overloaded the budgets and influenced the net results of airlines, despite the growth in the number of passengers on the international route network.

Lozi said that last year, the consequences of the global economic crisis continued to directly affect the performance of the international economy, which showed in trade, investment, employment and budget deficit. In addition, instability and regression affected the performance of the majority of the stock exchange markets.

Lozi pointed out that those reasons reflected on the airlines whose yield went down. That was also due to ticket price competitiveness, particularly among the carriers operating in the Middle East and the Arab Gulf.

He added that in light of these big challenges, RJ exerted its utmost efforts in 2010 to improve its competitiveness. It encouraged its personnel to work more and be more productive; it continued automating its systems and applied advanced electronic solutions in different fields of work. There have been major upgrades in the services offered passengers onboard and of all travel procedures, as the company is aware that services are an important tool needed to compete with the other airlines.

Lozi said that the efforts of the company’s management and staff members were successful and are admired by the board members. Due to these efforts, RJ was capable to increase the number of passengers in 2010 by 13% over 2009, to reach 3 million passengers transported on its aircraft. This led to a growth in revenues, which reached JD685 million, a 14% increase compared to 2009. Additionally, the uplifted cargo increased by 29%, the flight frequencies by 9% and flying hours by 7%.

The increasingly sharp competition in the region, according to Lozi, is the factor that most contributed to the drop in ticket prices and the inability to increase yield, which had a direct impact to the company net profits. The steep rise in oil prices increased RJ’s fuel bill from JD151 million in 2009 to JD203 million in 2010, marking a 35% increase.

The chairman said that this explains the decline in net results to JD9.6 million, compared to JD28.6 million in 2009. The operational expenses rose due to the previous reasons from JD504 million in 2009 to JD603 million in 2010, marking a 19.6% increase.

He added that in 2010, RJ continued implementing strategic plans to promote its services.

The achievements in 2010 also included continued fleet modernization, broadening of the route network and increasing flight frequencies. Last year, RJ successfully improved on-time performance, automated travel procedures, implemented by all international air carriers, particularly RJ partners in the oneworld airline alliance. The distinguished achievements in these areas drew the admiration and satisfaction of passengers, which qualified RJ to win the Airline of the Year 2010 Award.

In response to the shareholders’ questions, the chairman and president/CEO, Hussein Dabbas, said that RJ will continue, despite the challenges, its endeavors to increase the shareholders’ equity without increasing the capital directly, and without putting additional financial burdens on the shareholders. It plans to rely on its successful programs, on employees' efficiency, on its modern fleet and on its expansion plans. It also strives to improve its services, operations, human resources and its engineering and maintenance services.

At the end of the session, the general assembly approved the Board of Directors' financial report for 2010, its future plans and the financial statements. It also discharged the Board of Directors and chose Ernst and Young Company as RJ's auditor for 2011.

The general assembly also decided to retain earnings in 2010 to support the company capital and invest in the profits, to execute the plans and different expansion projects and to boost the company position in order to face the challenges of the present situation.

 Immediately after the ordinary session, the general assembly held its extraordinary session to amend one article of the "articles of association", increasing borrowing to become 250% of the capital instead of 150%. The general assembly approved this amendment that gives the company more flexibility to fund its capital projects, especially its decision to add 11 new Boeing 787s starting with 2014 to serve the long-haul routes.

Source: Press Release (Royal Jordanian)