One of the outstanding factors in Jazeera Airways’ turnaround over the past 15 months has been the dramatic jump in the yield levels achieved by the carrier. Having shrunk into profitability, the Kuwait-based carrier has fewer routes and less aircraft but has reported five consecutive quarters of record profits and is set to report its best-ever full-year result for 2011.
At the end of 3Q2011, the carrier reported yields of 52.3 Kuwaiti dinars, up 42% over 3Q2010 and a remarkable 91% above 3Q2009 levels. Increasing yields are expected to continue through the final quarter of 2011 and into 2012. This provides a tremendously strong platform for the carrier to develop from, as it puts in place its strategic development plan over the next few years.
Jazeera Airways yield performance (Kuwaiti dinars): 1Q2009 to 3Q2011
Source: Centre for Asia Pacific Aviation and Jazeera Airways
The airline has attributed its yield improvement to a number of factors. The first has been its adjustment of capacity, cutting its fleet from 11 to five aircraft and using its Sahaab Leasing unit to turn that excess capacity into a profit-generating assets. With a slimmed-down fleet, the airline is operating at or close to peak-capacity on a year-round basis, ensuring that its operates profitably for every month of the year.
In Mar-2011, the carrier went and cancelled 25 of 30 aircraft on order, going against the prevailing trend in the region. Fleet growth will now be limited to a fleet of 15 aircraft, shared between the airline and its leasing unit, which will be delivered at a trickle over the next three years.
Outside of its fleet management, the carrier’s adjusted network focus has also boosted its yield performance. It has limited its network to 18 destinations, cutting six loss making routes in favour of focusing on cities within two and a half hours of flying time of Kuwait, with the notable exception of Istanbul. All destinations have been selected for their ability to fit business schedules, prioritising passenger convenience at the cost of some operational efficiency.
Source: Jazeera Airways
On time performance has also been enhanced, partly thanks to the network restructure and retiming, reach 94% for the year to the end of Oct-2011, including a remarkable 98% performance in Sep-2011.
Over the past 12 months, Jazeera Airways has concentrated on achieving a market-leading position on the majority of its routes, giving it a strong pricing position. The carrier’s network will remain static over the next three years under Jazeera’s new ‘STAMP’ strategic plan.
Jazeera Airways market share by route:
| Route | Jazeera Airways |
| Alexandria (ALY + HBE) | 34% |
| Aleppo | 66% |
| Amman | 33% |
| Assiut | 48% |
| Bahrain | 17% |
| Beirut | 36% |
| Cairo | 26% |
| Damascus | 42% |
| Deir Ezzor | 81% |
| Dubai | 17% |
| Istanbul (IST + SAW) | 8% |
| Jeddah | 17% |
| Riyadh | 12% |
| Luxor | 80% |
| Mashhad | 28% |
| Sharm El Sheikh | 70% |
| Sohag | 33% |
Source: Jazeera Airways