Jazeera remains in profit but analysts have concern over the bigger picture

Saj Ahmad said: “Jazeera Airways' has clearly been hit hard by the proliferation of low cost services in the GCC and their financial performance from a year ago shows just how aggressive and difficult profitability can be in the region.”

Jazeera Airways Group chairman Marwan Boodai (pictured right) was more optimistic. “Our results this year constitute the highest Q1 earnings in the history of the Group, second to only 2013’s Q1 results, which was an exceptional quarter as we reported last year, ” he said.

“Our outlook for the year remains unchanged and we expect to register bottom line growth driven by an exceptional summer season with the holy month of Ramadan falling earlier in the season. We look forward to another growth year reinforced by investments in our product, investments that will bolster the on-ground experience and clearly distinguish Jazeera Airways from competitors.”

But Ahmad warned “Jazeera Airways suffered a sharp fall in operating profits by 37% on decreased revenues that also slid by 6%. This leads to questions about whether yield and load fact erosion are flat lining or whether they will tumble more in the next quarter, particularly as the fasting month of Ramadan is earlier this year and reduced demand will hit pretty much every Arab airline.

“The saving grace for Jazeera is that it is still a more productive and robust player versus Kuwait Airways, but the likes of Flydubai and Air Arabia have arguably cornered the low cost, no frills market and it's evident from Jazeera's financials that they are struggling to compete on price as well as product.”

But according to Boodai, Jazeera is continuing to invest. “We are currently in the last stages of launching a dedicated gates facility at Kuwait International Airport. This latest invest in dedicated gates, which will have the most advanced bridges at Kuwait International Airport, will enable Jazeera Airways to offer a better, easier, and more streamlined boarding experience for customers,” he said.

“By June 1, 2014 flying with Jazeera Airways will be a streamlined experience from check-in to boarding to flight. With our new exclusive gates at Kuwait Airport, our customers will no longer be exposed to the airport’s gates’ congestion during peak times. This investment will significantly bolster our product offering”.
Ahmad said that Jazeera had some other advantages. “The recent moves to Ataturk Airport in Istanbul and increased frequencies to Al Maktoum International Airport during the runway upgrades at Dubai Airport will give Jazeera Airways a competitive foothold moving forward - the real gambit is to turn the demand it has into positive revenue flows,” he said.