Jazeera Airways reveals 2019 financial results

Jazeera Airways chairman Marwan Boodai said: “Jazeera Airways ended the year with the best set of operating results in the airline’s history.”  Image: Jazeera Airways.

Shareholders approved the company’s audited accounts and reports for the year. 

Chairman Marwan Boodai said: “As we review another record year for Jazeera Airways, the world is witnessing a pandemic that has affected the aviation industry with flights being suspended in countries around the world since March 2020.

“During 2019, our airline continued to deliver on its growth plan, strengthening the foundations that have time and again enabled our airline to overcome past crises, and ending the year with the best set of operating results in the airline’s history. Jazeera Airways continued to grow and expand its footprint in the Middle East, Europe and Asia. The expansion was supported by a growth in its fleet with the delivery of three new Airbus A320neo aircraft as well as growing operations at Jazeera Terminal T5 at Kuwait International Airport.”

2019 in review: Expanding the network and growing the fleet

Following the expansion in 2018 into the Indian Subcontinent market which satisfied a latent demand in the market and provided new opportunities for transit itineraries, Jazeera Airways marked a new milestone in 2019 with the launch of a direct service to London Gatwick in late October with its newest A320neo aircraft. This made Jazeera Airways the first Low-Cost Carrier (LCC) in the Middle East to fly to the United Kingdom (UK) and also marked the first new service to the UK from Kuwait in 55 years.

The expansion to London Gatwick not only satisfied travel between Kuwait and London, but also served a large customer-base for transit flights from the Indian Subcontinent, Gulf countries and other destinations to which we launched new services during the year.

Among these new services were underserved and high-potential traffic destinations of the Nepalese capital Kathmandu, Osh in Kyrgyzstan, the second largest city of Pakistan, Karachi, and Dammam in Saudi. With Kathmandu, Osh and Karachi, Jazeera Airways opened travel routes for leisure travelers, expatriates in the Middle East region travelling back home as well as transit flights for religious pilgrimage.

In addition, the airline launched services to the high-demand touristic destinations of Istanbul with new routes to the Sabiha Gokcen International Airport, the Turkish coastal city of Bodrum and for the first time ever from Kuwait and one of the few routes serving UAE’s family leisure destination, Al Ain.

Jazeera Airways supported these expansions with the delivery of three new Airbus A320neo aircraft in Q4 2019.

By the end of 2019, Jazeera Airways was serving 37 airports from Jazeera Terminal 5 with a fleet of 13 aircraft comprising of nine A320 and four of the A320neo.

Also by year end, Jazeera Airways carried 2.4 million passengers point to point to and from Kuwait as well as through the Kuwait hub on connecting flights.

Best operating results in the airline’s history

The significant leap in Jazeera Airways’ profitability in 2019 is the result of profitable growth coupled with an aggressive focus on cost management.

•           Operating revenue: KD103.7 million, up 25.9% from FY 2018

•           Operating profit: KD14.2 million, up 108.7% from FY 2018

•           Net profit: KD14.9 million, up 124.1% from FY 2018

•           Passengers: 2.4 million, up 20.6% from FY 2018

•           Load factor: 77.5%, up 2.3% from FY 2018

•           Aircraft utilization: 13.3 hours

•           Yield stood at KD41.5, up 1.6% from FY 2018

Highlight of EGM

Shareholders approved adding a new article (number 59) to the Company’s Articles of Association. The new article is: “Subject to the provisions contained in the Company Contract, the ordinary general assembly meeting, upon the proposal of the board of directors, may distribute dividends to shareholders at the end of the financial year or at the end of each financial period. Such distribution shall be valid if the profits are real, if these are made in accordance with the generally accepted accounting principles and do not affect the paid-up capital of the company.”

Outlook for 2020

While Jazeera Airways has previously announced plans to continue expanding its network and introduced its new fare categories at the start of 2020 to enhance its position as a leading LCC, the Covid-19 pandemic has placed the expansion plans on hold as the world weathers through this crisis.

Boodai said: “As a private sector company, we are taking full responsibility to ensure our business continuity. Therefore, we have implemented decisive measures to safeguard our financial position caused by the Covid-19 pandemic, including the suspension of the 2019 dividend payment and activating the drawdown of bank facilities that were not previously tapped to support Jazeera’s ongoing liquidity through the coming months. We have always taken prudent and pivotal actions in difficult circumstances. In such times, placing our employees and customers first is our priority.

“We are committed to our role as a Kuwaiti national carrier and will continue to perform our part to ensure we can support the economy and uphold our national duty.”

Jazeera Airways made its fleet available for full cargo flights to transport necessary produce and goods, and have proudly placed its fleet at the disposal of the State of Kuwait to support its efforts in repatriating citizens. The Company also redesigned its Park & Fly facility, previously for long-term parking and remote check-in, to setup the first Covid-19 drive-through testing center in the country in cooperation with the Ministry of Health.

Boodai concluded: “In the past 15 years, we’ve weathered through many macro and micro-economic challenges, from a global financial crisis, a recession, geopolitical challenges in a number of the countries we serve, oil fluctuations, and regional overcapacity in a highly competitive environment driven by government-back airlines. We have confidence that Jazeera Airways will once again come out stronger from this crisis.

“Our goal by the end of 2020 is not the bottom line, but our readiness for the following year, the year 2021. Until then, Jazeera Airways has a strong balance sheet and financial reserves enabling it to withstand difficult conditions for 27 months.

“In these times, I take this opportunity to thank Boursa Kuwait and Kuwait Clearing Company for enabling virtual meetings and ensure business continuity. I also thank our team for placing our Company first to safeguard its employees and customers as best as possible, and thank our shareholders for trusting our management. And most importantly, I thank His Highness the Amir, Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah and His Crown Prince, Sheikh Nawaf Al-Ahmad Al-Jaber Al-Sabah and the Government of Kuwait for the unrivalled support and commitment provided to our country.”