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Sat 26 Feb 2011 03:45 PM

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Royal Jordanian sees full-year net profits plunge 66%

State-backed airline said surging fuel prices squeezed margins, despite passenger load rising 13 percent

Royal Jordanian sees full-year net profits plunge 66%
The airline is looking to expand network and connect with African nations and the Middle East

Royal Jordanian, the Arab state’s flag carrier, has posted a 66 percent decline in net profits for 2010, hit by surging fuel costs.

The carrier said net profits for the twelve months to December 31, 2010 were $13.5mm a decline of 66 percent on the year-earlier period.

While the number of passengers and departures increased, the airline's fuel bill surged 35 percent to JD203m ($285.9m), squeezing margins, the carrier said in an emailed statement.

The rising fuel bill led to operational expenses rising 20 percent to JD504m ($709.8m).

President and CEO Hussein Dabbas 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 up 14 percent to JD685m ($964.7m).

Overall, net profit was down 13 percent to JD82m ($115.4m). Late last year, Dabbas forecast that the carrier would make “a decent profit” in 2010.

Royal Jordanian is eyeing emerging markets in a bid to boost its market share, Dabbas said.

“We have no proper connection with Africa and we are seeing that the African continent is up and coming, economically and the people have started to have a lot of disposable income to travel.

“We would like to expand into Africa to expand more on the network and connect the African nations with Jordan and the Middle East.

Royal Jordanian operates 32 aircraft. In June last year, the carrier said it would introduce seven new Airbus A320 and A321 aircraft, with the first delivery slated for April 2011.

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