State-backed carrier Royal Jordanian (RJ) has increased its borrowing levels to finance its fleet expansion over the next three years, the carrier said Tuesday.
The Amman-based carrier’s general assembly on Monday approved plans to allow the airline to raise its borrowing levels from 150 percent of available capital to 250 percent.
“The general assembly approved this amendment that gives the company more flexibility to fund its capital projects… to serve the long-haul routes,” the airline said in an emailed statement.
The airline plans to purchase seven Boeing 787s and lease another four, a spokesperson said. The aircraft, which will start to join the carrier’s 32-strong fleet in 2014, will be used to open up routes in lucrative emerging markets.
“We have no proper connection with Africa and we see that the African continent is up and coming, economically,” president and CEO Hussein Dabbas said. “The people have started to have a lot of disposable income to travel. “We would like to… connect the African nations with Jordan and the Middle East.”
Jordan’s flagship carrier posted a 66 percent decline in full-year net profit to $13.5m as surging fuel costs impacted earnings.
While passengers and departures rose, the airline’s fuel bill surged 35 percent to JD203m squeezing margins, the carrier said.
Dabas said the airline carried three million passengers in 2010, a rise of 13 percent on the previous year. Load factor rose from 68 to 71 percent in 2010, pushing revenue to JD685m.For all the latest transport news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.