Royal Jordanian charts out operational changes

Royal Jordanian charts out operational changes

The recently concluded general assembly for Royal Jordanian’s held its fifth annual ordinary session in Amman, presided by chairman of the board of directors Nasser Lozi. The general assembly elected a new board of directors for the coming four years. They are: Eng Nasser Lozi and Senator Akel Biltaji representing the government of the Hashemite Kingdom of Jordan, Eng Abdel Rahman Al-Khatib representing the social Security corporation, Maher Najeeb Mikati representing the Mint Trading Middle East Limited, in addition to Dr Marwan Awad, Shareef Al-Zubi, ‘Mohammed Ali’ Bdeir, Amr Bilbeisi and Samer Muasher.

Nasser Lozi highlighted that the year 2012 was a year of big challenges. The political turmoil influenced economies of countries and harmed businesses to an unprecedented extent. As a result, the demand for travel to and from Jordan and the region vastly regressed. In RJ case, most of its routes saw a drop in the demand for travel, particularly to destinations where instability prevailed, such as Libya, Egypt, Syria, Yemen, Bahrain and others.

Tourism from conventional tourism markets in Europe and the Far East deteriorated in 2011 as well. RJ saw a clear drop in the number of European tourist groups; it lost around 125,000 European passengers.

The airline witnessed a 15% to 20% growth in the number of passengers and revenues in past years, in 2011 saw only a 6.2% increase in the number of passengers, which led to a 7.5% growth in revenues and 3% growth in flight frequencies and flying hours. Despite these modest increases, the 19.4% increase in the operational expenses prevented the airline from registering net profits in 2011.

One other main reason for the negative results in 2011, added Lozi, was the 44% increase in fuel prices over 2010. The number of passengers increased to 3,155,000, against 3 million passengers transported in 2010.

The airline has in 2012 taken several decisions to overcome this difficult period and avoid unsatisfactory results. It decided to suspend operations to several destinations where, studies showed, demand was lowest. The company, Lozi added, also decided to reduce frequencies to some stations, like Rome, Vienna, Zurich, Geneva, Amsterdam, Colombo and Khartoum.

The airline will continue to cancel flights if need be, depending on volume of bookings to some destinations. Last year, 1,400 flights were cancelled; more than 500 were cancelled in the first three months of this year. According to Lozi, the company is running a cost-control policy on all capital expenditures, in addition to having frozen recruitment. It is focusing on raising the employees’ productivity, increase revenues and reduce costs.

Attending the general assembly were also members of the board of directors, RJ President/CEO Hussein Dabbas, the companies’ general comptroller, Ernst and Young auditors of RJ accounts, and a number of shareholders owning 64.4% of the company capital, which amounts to 84.3 million shares/dinars.

Gary Marshall
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Gary Marshall
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Middle East

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