Marwan Boodai, Jazeera Airways Group Chairman
Jazeera Airways Group today announced its fourth quarter (Q4) 2010 results to regional and international analysts, and said it had closed another profitable quarter for the airline with a net profit of KD2 million following the implementation of the company’s Turn-Around Plan in May 2010.
The company said that it had improved its FY2010 earnings by KD5.4 million over FY2009 earnings by registering a net loss of KD2.8 million. FY2009 earnings stood at net loss of KD8.2 million.
Established in 2005, Jazeera Airways Group is Kuwait Stock Exchange-listed company with over 12,000 shareholders. The company operates 11 fully-owned Airbus A320s, distributed between its airline business (6 aircraft), Jazeera Airways, and through its leasing-arm Sahaab Aircraft Leasing (5 aircraft). Sahaab has assets placed with Virgin America, Sri Lanka Airlines, and Jazeera Airways.”
Speaking to analysts via the Group’s quarterly webcast, Chairman Marwan Boodai said: “We’ve had our best second half (H2) in our history. The H2 earnings, and the drastic shrinking of our losses compared to 2009’s results, are a direct result of the measures we implemented in mid-2010 as part of our business Turn-Around Plan. Jazeera Airways today versus Jazeera Airways Group last year is a much healthier business that has taken the turn to profitability. We are definitely on the right track.”
Boodai told the analysts: “Jazeera Airways Group today has a solid network, increasing load factors, reduced cost, and high aircraft utilization, in addition to being a diversified business with revenue-generating assets deployed across the globe, from US and Middle East to Asia thanks to our fully-owned leasing arm Sahaab Aircraft Leasing.
“In addition to closing a profitable Q3 and Q4, we are happy to report that we now enjoy a lead in market share on the routes we serve. Jazeera Airways Group today is the largest regional operator in Kuwait, market leader on the overwhelming majority of its routes. Looking forward we are optimistic about 2011 and working hard on sustaining profitability for the year”, said Boodai.
2010 in review
Last year was a milestone year for Jazeera Airways Group. In February, after experiencing the overcapacity in its home market -Kuwait-, the Group acquired Sahaab Aircraft Leasing to utilize it for the re-deployment of some of its excess capacity to other international markets. The acquisition proved invaluable and started generating revenues immediately for the Group since Jazeera Airways was already a customer for Sahaab. Shortly after the acquisition, Sahaab acquired more customers, successfully placing five aircraft with world-class airlines Virgin America and Sri Lanka Airlines.
However, by end of the first Quarter, more capacity was dumped in the market by other local and regional players, impacting the Group’s bottom line results as seen in the Group’s first half results. Jazeera Airways Group responded with a Turn-Around Plan aimed at re-aligning to the prevalent market environment and to bring the company back to profitability.
The Turn-Around Plan was implemented in May 2010, and included asset redeployment, staff reductions, rigorous cost management, network/market alignment and enhanced commercial offering, which was rolled over several months.
The Plan began yielding results immediately and above expectations. Just three months into it, Jazeera Airways Group’s closed its best performing quarter in history and reported a net profit of KD4.4 million for the third quarter.
Six months into the plan, Jazeera Airways closed the fourth quarter with a KD2 million in profit. Though Jazeera Airways had been profitable on an annual basis since inception and until 2008, this was the first time that it closed two consecutive quarters with positive results. This was 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, or 15% of Kuwait International Airport passengers, on a total of 14,156 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 and Sohaj, Jeddah and Riyadh.