Viability of privatizing Royal Jordanian Airlines to be studied
The International Finance Corporation, the private sector arm of the World Bank Group, has been appointed by the Executive Privatization Committee of the Jordanian government to conduct a feasibility study to determine the viability of privatizing Royal Jordanian Airlines. The study will be undertaken by IFC’s technical assistance facility that supports private sector development in the Middle East and North Africa, PEP-MENA.
Royal Jordanian Airlines began operations in 1963, flying three international routes with a limited number of aircraft. Today, Royal Jordanian, with its hub at Queen Alia International Airport in Amman, serves more than 50 cities in the Middle East, Africa, Europe, North America, and Asia. Its fleet comprises 17 Airbus jets, including four A340s, with 10 additional Airbus jets on order for delivery in 2006.
The Jordanian government, in an effort to increase the capacity of the country’s tourism industry, is developing its airport and airline infrastructure. IFC is expected to gauge the investment potential of the sector and identify conditions for a successful privatization of Royal Jordanian Airlines. The government will base its decision about the privatization process on the outcome of the feasibility study.
Moh'd Abu Hammour, Chairman of the Executive Privatization Committee, stated, “Royal Jordanian has made progress, but there is a strong role for the private sector to play in helping it compete in the international aviation sector and improve service to travelers. Strengthening the airline is essential to developing Jordan’s tourism industry.”
Mr. Jesper Kjaer, IFC’s General Manager for PEP-MENA, noted that “The development of Royal Jordanian Airlines will provide a solid foundation for Jordan to compete in the global market. It will increase air transport links, which are essential for commercial trade.”
PEP-MENA is IFC’s technical assistance facility that supports private sector development in the Middle East and North Africa. PEP-MENA focuses on improving the business-enabling and regulatory environment in the region; strengthening the financial sector; promoting the growth of small and medium enterprises and their support services, such as business organizations and consulting firms; helping restructure and privatize state-owned enterprises; and developing viable private sector and public-private partnership projects, especially in infrastructure.