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Wed 23 Nov 2011 06:01 PM

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Fuel costs weigh on Royal Jordanian net profit

Airline chief says revenues up 8% in October but fuel cost pulls down profitability

Fuel costs weigh on Royal Jordanian net profit
Hussein Dabbas, president and CEO of Royal Jordanian

Royal Jordanian said revenues in October rose by eight percent compared to the same month last year but high fuel prices stopped the airline achieving a net profit.

Hussein Dabbas, the airline's president and CEO said that operating revenues reached JD60.2m ($85m) last month, compared to JD55.7m during the same month last year.

Operating profit reached JD18.8m, while the operating cost - excluding fuel - rose from JD38m in October 2010 to JD41m as a result of operational traffic growth and an increase in the number of frequencies and flying hours.

Dabbas said that the continuous fluctuation of fuel prices was the "major reason that prevented the airline from achieving a net profit in the mentioned month".

He said the fuel bill paid by the company last month amounted to JD24.2m, an increase of 42 percent over the same month last year.

The total fuel bill paid by the airline since the beginning of 2011 until the end of October amounted to JD246m, compared to JD168m in the same period of 2010, representing a 46.2 percent increase.

Dabbas also said that the carrier suffered from a decline in tourism and travel to the region, particularly from Europe, due to the Arab Spring.

Royal Jordanian carried 263,000 passengers during October, a 5 percent increase on October 2010.

The airline operated 3,312 flights, up 4.8 percent in october, Dabbas added.

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