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RJ posts positive Q3 results

Turnaround plan mainly based on sustainable profitability

By JT - Oct 31,2017 - Last updated at Oct 31,2017

RJ’s President/CEO Stefan Pichler highlights RJ’s plans at a press conference on Tuesday (Photo courtesy of RJ)

AMMAN — Royal Jordanian (RJ) posted JD31.8 million in net profit in this year’s third quarter against JD12.9 million net profit in the same period last year, RJ’s President/CEO Stefan Pichler said on Tuesday.

Pichler was speaking at a press conference on Tuesday during which he presented the national carrier’s turnaround plan which was approved by RJ’s Board of Directors during its session on Monday.

RJ’s finances have started to recover since the beginning of June, which marked the start of the company achieving first monthly net profit in 2017, he said. 

He noted that the net income increased exponentially in the following months, enabling RJ to cover the JD27.8 million losses, incurred in the first five months of the year.

According to Pichler, RJ’s strategic objective is to position itself as the number 1 network carrier in the Levant.

This is based on three main pillars, foremost of which is sustainable profitability that attracts the capital market and targets increasing operating margins in the coming five years. 

The second pillar focuses on RJ being a consumer champion, by thinking of customers first and delivering a consistent customer experience across all touch points.

The third pillar is to see RJ become the employer of choice, attracting and retaining talented and skilled workforce, while providing the best training and career planning, and managing and rewarding performance.

Royal Jordanian will keep offering super-low fares to retain loyal customers and gain new ones who will also see improved services and a seamless travel experience, he said in the statement.

Royal Jordanian will open new international routes in the coming five years, to Washington, Copenhagen, Stockholm and Kyrenia, in Cyprus, and will resume flying on previously suspended routes, including Damascus, Mosul, Sanaa, Aden and Benghazi, he noted.

In terms of its fleet, the company will merge into a single supplier for all the narrow body fleet from currently two aircraft manufacturers, considerably reducing expenses on maintenance, spare parts and training. 

Additionally, the airline will add more Economy Class seats in its narrow-body planes, and thus increase the earning capacity, by cutting down the number of Crown Class seats while keeping the comfortable pitch of both classes’ seats. This move will generate more revenues for RJ.  

Pichler noted that today’s fleet of 26 aircraft will grow gradually to reach 30 by 2021; seven of them will be the currently operating 787s.

Under the turnaround plan, Royal Jordanian will exert more effort to boost its presence in Aqaba, in cooperation with the Aqaba Special Economic Zone Authority and local tourism entities, with the objective of increasing traffic to the coastal city from several countries around the world, he added.

This will lead to supporting the economy and bringing in more revenues for the airline. He voiced hope “that the Aqaba authorities as well as business community will support us to the same degree we want to support them and to the best of our economy”.

 

He said that the five-year plan will include major initiatives that are expected to enhance unit revenues by 7 per cent and lower unit costs by 6 per cent

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