Freedom Town, Kuwait – April 24, 2011 — Award winning Jazeera Airways Group today held its Annual General Meeting of Shareholders at the company’s headquarters in Freedom Town, Kuwait where it unveiled to shareholders the measures the airline took to successfully bring it back to record profitability in the second half of 2010.
2010 financial highlights:
- FY2010 operating profit of KD5.3 million, vs. 2009 operating loss of KD5.4 million
- FY2010 net loss of KD2.8 million, vs. 2009 net loss of KD8.2 million
- FY2010 revenue of KD42.6 million
- Best third quarter earnings on record, best second half since 2008
- Two consecutive profitable quarters at ‘operating’ and ‘net’ levels for the first time
- Acquisition of Sahaab Aircraft Leasing generated immediate and growing revenues
2010 commercial highlights:
- Second half load factors increased by 11% to 66%, compared to the same period in 2009
- Average yield improved by 40% from KD24.4 to KD34.4 in second half of 2010, compared to the same period in 2009
- 2010 Travel agency sales up 6% from 2009
- Market dominance on most routes
- Solid network, profitable routes
- High aircraft utilization
- Reduced cost and continuous robust cost management
Speaking to shareholders at the airline’s AGM, Jazeera Airways Chairman Marwan Boodai said: “Our performance in 2010 was not just about drastically cutting our losses. It was about turning around our business and bringing it back to profitability after a year of consecutive quarterly losses due to various external reasons. Chief among these external factors was the incredible overcapacity that was dumped on Middle Eastern routes by other players, mostly governmental airlines.”
Boodai said:
One of the first initiatives we took to help us manage the excess capacity in the market was our acquisition of Sahaab Aircraft Leasing in February 2010. Our goal was to utilize it as a vehicle for the redeployment of some of Jazeera Airways’ excess capacity to other international markets. The acquisition proved invaluable and started generating revenues immediately for the Group, since Jazeera Airways was already a Sahaab customer. Later in the year, Sahaab acquired more customers, successfully placing five aircraft with world-class airlines, four of which were with Virgin America and one with SriLankan Airlines.
Building on the acquisition of Sahaab, the management began rolling out a set of measures that we internally called the Turn-Around Plan (TAP) in May 2010. The plan’s objective was to bring the airline back to profitability by resizing the business to meet the external business environment. These measures included asset redeployment, staff reductions, rigorous cost management, network/market alignment and an enhanced commercial offering, which was rolled out over several months.
The plan began yielding results immediately and above expectations. With just three months into the plan, Jazeera Airways Group reported a net profit of KD4.4 million for the third quarter, which was our best quarter on record.
Six months into the plan, Jazeera Airways closed the fourth quarter with a KD2 million in profit. This was the first time that Jazeera Airways closed two consecutive quarters with positive results at the net and operating level. The earnings were a clear sign to the market that the airline is well into sustaining profitability.
By year-end, the airline carried 1.3 million passengers in total, 15% of Kuwait International Airport passengers, on a total of 14,276 flights across its network, that includes high-demand business, leisure, family, and weekend destinations such as, Dubai, Bahrain, Beirut, Alexandria, Amman, Damascus, Istanbul, Sharm El Sheikh, Doha, Assiut, Aleppo, Deir Ezzor, Luxor, Mashhad, Sohaj, Jeddah and Riyadh.
In 2006, 2007, and 2008 Jazeera Airways was the only profitable airline in Kuwait and one of the few profitable airlines in the Middle East. Today, we are back to being the only profitable airline in Kuwait for the past two quarters, and one of the few profitable airlines in the Middle East as well for the same period.
In the end, the Turn-Around Plan worked to ensure that we have a profitable business every quarter. We now have the right capacity, the right network, the right cost structure and the flexibility to weather both business and political turbulence in the Middle East, and above all, we have a world class aviation team to navigate the company through future challenges. I would like to thank our team for their hard work and dedication, for without them the success of TAP wouldn’t have been possible.
Looking forward, it goes without saying that we plan to continue being profitable in each and every quarter of 2011, to grow the gap between us and our competitors, and to see the full effect of Sahaab’s contribution to our bottom line in 2011 and the years to come.
Established in October 2005, Jazeera Airways Group is a Kuwait Stock Exchange-listed company with over 12,000 shareholders. The company has 11 fully-owned Airbus A320s in operation, distributed between its airline business, Jazeera Airways (6 aircraft), and its fully-owned leasing business, Sahaab Aircraft Leasing (5 aircraft). Sahaab has assets placed with Virgin America, SriLankan Airlines, and Jazeera Airways.