Royal Jordanian Airlines posts $55.3m loss in H1

CEO Hussein Dabbas says regional turmoil and higher oil prices contributed to first half losses
Royal Jordanian Airlines posts $55.3m loss in H1
Royal Jordanian Airlines President and CEO Hussein Dabbas
By Bloomberg
Sun 31 Jul 2011 06:09 PM

Royal Jordanian
Airlines lost 39.2 million dinars ($55.3 million) in the first half
because of regional turmoil and higher fuel prices, CEO Hussein Dabbas said.

The airline
cancelled 677 flights and merged another 80 in the period, he said today
at a press conference in Amman, where the company is based. It suffered
from the wave of pro-reform protests and unrest that swept the Arab
world since January, particularly in key destinations such as Tunisia,
Egypt and Bahrain, he said.

The fuel
bill at Royal Jordanian, the first Middle East airline to order Boeing ’s 787 Dreamliner, came to 134 million dinars in the half, according
to the CEO.

That compares with 93 million dinars for all of 2010 and 63
million dinars in the prior year, he said. Crude oil has averaged $98.29
a barrel in New York trading this year, data compiled by Bloomberg
shows.

“Our budget
for this year is based on $85 a barrel,” Dabbas said. Jet fuel accounts
for 44 percent of operating costs at Royal Jordanian, according to the
CEO.

Royal
Jordanian has started buying fuel in locations where it costs less than
in Jordan, the CEO said. “We fly to 69 destinations, of which 33
destinations sell fuel at cheaper prices than here,” he said.

The company
is “optimistic” about the outlook for third- quarter sales and profit,
Dabbas said. First-half sales climbed 3.5 percent from a year earlier to
303.7 million dinars, he said.

The airline
plans to add 11 Dreamliners to its fleet of 32 aircraft, according to
the CEO. Boeing has postponed deliveries of the 787 seven times,
resulting in a three-year delay, after grappling with new materials and
production systems required for the world’s first composite airliner.

The first Dreamliner is now due for handover to All Nippon Airways
by September.

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