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Mon 23 Mar 2020 05:14 PM

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Kuwait's Jazeera suspends dividends in bid to cope with Covid-19

Jazeera Airways has decided to suspend its previous recommendation to distribute dividends to shareholders for the 2019 financial year

Kuwait's Jazeera suspends dividends in bid to cope with Covid-19

Kuwait-based Jazeera Airways has decided to suspend its previous recommendation to distribute dividends to shareholders for the 2019 financial year in a bid to cope with losses caused by the coronavirus outbreak.

The airline's board of directors have taken the decision to enable it to "weather through current challenges and protect the business in the long-term", a statement said.

Chairman Marwan Boodai said: “As a private sector company, we are taking full responsibility to ensure our business continuity. Therefore, we have implemented decisive measures to safeguard our financial position caused by the Covid-19 pandemic, including the suspension of the 2019 dividend payment and activating the drawdown of bank facilities, that were not previously tapped, to support Jazeera’s ongoing liquidity through the coming months.

"We have always taken prudent and pivotal actions in difficult circumstances. In such times, placing our employees and customers first is our priority by ensuring they are not affected in the long-run. We are committed to our role as a Kuwaiti national carrier and will continue to perform our part to ensure we can support the economy and uphold our national duty.”

According to the International Air Transport Association (IATA), ore than 16,000 passenger flights have been cancelled in the Middle East and the number is expected to increase exponentially with the additional measures in different countries.

International bookings in the Middle East are down 40 percent year-over-year in March and April, as of March 19.

In Kuwait alone, IATA said Covid-19 disruptions could result in a 2.9 million loss in passenger volumes and $547 million loss in base revenues.

Boodai added: “Jazeera Airways has faced previous challenges in its history and is confident that the underlying position of the airline is capable to successfully manage this current period. We believe the situation is temporary and the aviation market as well as Kuwait economy will stabilise and return to growth."

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