By Andy Sambidge
Airline records 12 straight quarters of profitability; remains upbeat on outlook
Kuwait-based Jazeera Airways Group on Tuesday announced a record net profit of KD3.9m ($13.7m) for the second quarter of 2013, making the first half of 2013 the airline’s most profitable first half in history.
The company had previously announced a record net profit of KD3.6m for the first quarter.
The company’s record H1 earnings bolster the company’s track-record of 12 straight quarters of profitability.
Revenue for the first half of 2013 reached KD30.8m, up nine percent of the year-earlier period while net profit rose to KD7.5m, up 95 percent from H1 2012
The airline also said the number of passengers carried during H1 increased by 4.1 percent while the load factor reached 70 percent, up 11.9 percent.
The carrier added in a statement that assets stood at KD145m with cash reserves of KD47m.
Jazeera Airways Group chairman, Marwan Boodai, said: “We started the year with the objective of building on last year’s momentum, and we’ve been successful so far as reflected in the first half financial, operational, and commercial results.
"We’ve carried more passengers than the same period of last year, with the average load factor exceeding targets while maintaining operational excellence. All together, this culminated in the impressive H1 results that were announced today. Our job is far from over and the team is working hard on closing yet another record-breaking year.”
The company said its outlook for the rest of 2013 continues to be positive in line with a growing Kuwaiti economy, which continues to witness higher incomes despite international and regional economic pressures.
Jazeera Airways Group expects a seasonal increase in demand in the third quarter, and a mild fourth quarter, it added.
Established in 2005, Jazeera Airways Group is a Kuwait Stock Exchange-listed company with a fleet of 13 A320s.
It flies to destinations including Dubai, Bahrain, Beirut, Alexandria, Amman, Istanbul, Sharm El Sheikh, Assiut, Luxor, Mashhad, Sohag, Jeddah, Riyadh, Cairo and Al Najaf.
Although Jazeera Airways is touting record profits, if you compare other regional low-budget carriers that also fly out of the Kuwait market, the numbers fall short. In comparison to Jazeera Airways fleet of 13 aircrafts, with an average age of 4.5 years, offering 15 destinations, a direct competitor, FLYDUBAI has a fleet of 30 aircrafts, with an average age of 2.2 years, that offers 61 destinations. Although Air Arabia flies into Sharjah from Kuwait, they have a fleet size of 32 aircrafts, with an average age of 2.9 years, and offer 82 destinations. It appears Jazeera Airways has a long way to go and it would be beneficial to upgrade their fleet and increase regional routes. Jazeera Airways could benefit from the short falls of their national carrier, Kuwait Airways, and carry the market, so they should not be so complacent with these figures. It has potentional to develop into a better airline that could better service the Kuwait market.
John - The Jazeera Airways Group has 13 aircraft (which includes Sahaab Aircraft Leasing), whereas Jazeera Airways (the airline) actually has only 8 aircraft. So, to be making a net half year profit of $13.7m with only 8 aircraft is, given the level of fixed costs, a very impressive result. Its financial metrics compare favourably with some of the world's best-performing LCC's. In any case, size isn't everything. Whilst also classed as low cost carriers, Jazeera, AA and FD all have very different operating models and home markets. AA is your classic bums on seats outfit, a volume business. FD focuses more on yield (its seat factors are c.65%) and indeed has retro-fitted business class seats. It is also being increasingly used to feed into Emirates' long-haul network (some 30% of its pax transit to EK flights). Jazeera, on the other hand, focuses on its home base of Kuwait and moving people in and out of that market. It absolutely is not trying to compete head on with AA or FD.