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Mon 1 Aug 2016 03:30 PM

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Kuwait's Jazeera Airways sees 38% fall in Q2 net profit

Passengers numbers rise 3.2% in first half of 2016 but performance impacted by overcapacity and rising fuel costs

Kuwait's Jazeera Airways sees 38% fall in Q2 net profit
Kuwaiti low-cost carrier Jazeera Airways. (Getty Images)

Kuwait-based Jazeera Airways has reported a net profit of KD2 million ($6.63 million) in the second quarter of 2016, bringing the company’s year-to-date net profit to KD6 million.

Net profit fell by 38.1 percent in the second quarter compared to the year-earlier period, the airline said in a statement.

It added that passenger numbers rose by more than three percent in the first six months of the year. 

Jazeera Airways chairman, Marwan Boodai, said: “We are pleased to report another strong quarter on the back of higher passenger numbers, in terms of both volume and load factor.

"That’s not to say it wasn’t a challenging quarter, we saw more capacity being dumped on our routes, rising fuel costs, and an expected shift of the summer season as most of Ramadan has now moved into Q2, thus shifting revenue and travel trends and slightly impacting our earnings.”  

He said the outlook for the year remains unchanged. While the excessive overcapacity poses a downward pressure on yields, the airline expects to counter this pressure in Q3 and close the year "with growth in operational profits and bottom line".

In July, Jazeera Airways was officially notified that its request to be allocated land at Kuwait International Airport to build a dedicated terminal was approved by the Kuwait Council of Ministers.

The terminal is a solution proposed by the airline to help ease the congestion at Kuwait International Airport, the country’s only primary airport, which is currently operating over capacity. The project’s investment value is KD14 million, and its total construction time frame is 15 months, including the permits acquisitions phase. 

Starting Q1 2017, Jazeera Airways said its fleet will be equipped with broadband internet technology from Rockwell Collins while the airline is also currently looking to expand its network to include key long-haul destinations by partnering with an international operator.

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