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Jazeera Airways announces FY 2020 earnings

Posted 22 February 2021 · Add Comment

Jazeera Airways today announced its earnings for 2020 reporting an operating revenue of KD41.4 million.

 

Image:  Jazeera Airways

Number of passengers flown during the year subsequently came in at 696,093, down from 2.4 million in 2019 with a load factor of 64.3% while yield increased 38.4% to KD57.4.

 

Jazeera Airways ended the year with a cash balance of KD19.7 million; a solid sign of how the company managed to navigate through a very tough and exceptional year and a confirmation of Jazeera’s solid and stable cash position. Operating revenue for 2020 stood at KD41.4 million while the company reported a net loss of KD26.4 million impacted by various one-offs and adverse accounting treatment specifically related to IFRS 16, which combined were equivalent to KD15 million.

 

Commenting on the results, Jazeera Airways Chairman, Marwan Boodai said: “Jazeera’s performance in 2020 was in line with industry benchmarks. Its number of passengers decreased by 71% during the year in comparison to 72.9% in the Middle East and 65.9% worldwide, while load factor decreased by 13.2% in comparison to 18.9% for the Middle East and 19.2% worldwide.”

 

“While the extent of the pandemic was not foreseen back in March 2020, Jazeera took immediate action to safeguard its position against airport closures and ensure its business continuity as a private company. The airline suspended its 2019 dividend payment, activated the drawdown of bank facilities that were not previously tapped and renegotiating cost structures with suppliers and aircraft manufacturers. We were very prudent in our cash management and closed the year with enough cash coverage for the upcoming 20 months without the need to access any additional external funding.”

 

“Jazeera’s flexible business model has proved once again its success in adapting to times of crisis to protect its customers, employees and shareholders’ rights. We were able to reallocate our resources to support our local community and economy in a commitment to our role as a Kuwaiti national carrier, served our customers when government regulations permitted and continued to commit to our obligations.”

 

Commercial flights at Kuwait International Airport were suspended for close to five months from March 13 until July 31. Operations resumed with limited capacity from suspended direct flights from 34 destinations, which increased to 35 by year-end, and a mandated 14-day quarantine for all incoming passengers slowed down demand for travel.

 

During the suspension of commercial flights, the airline redirected its capacity and capabilities to operating full-cargo and charter flights as well as supporting government efforts during the pandemic, mainly with the repatriation of Kuwaiti nationals.

 

 

In Kuwait, PCR testing on arrival is being implemented at Kuwait International Airport, which is a critical solution to ensuring the safety of passengers and citizens entering the country while the rollout of vaccinations is being accelerated by the Ministry of Health.

 

2020 was an exceptional year for airlines worldwide, impacted by the Covid-19 pandemic and qualified by the International Air Transport Association (IATA) earlier this month as the “Worst Year in History for Air Travel Demand”.

 

New Destinations

 

Jazeera launched its first service to the touristic destination of Trabzon on August 3, with two return flights per week every Monday and Friday. A second new service followed to Dhaka on October 1, and a third with weekly flights to Muscat on November 2.

 

Supporting Pandemic Efforts

 

Jazeera Airways started operating full-cargo flights to support business continuity with a capacity of up to 15 tons per aircraft and within a range of six hours flying time from Kuwait. The airline also continued to operate charter flights in coordination with the Ministry of Foreign Affairs to serve expatriates wishing to leave the country.

 

The airline also took part of the largest air bridge repatriation program by the State of Kuwait operating over 60 flights bringing home around 6,800 Kuwaiti nationals.  Repatriation flights extended from March 25 to May 10 and flew citizens back from London, Warsaw, Moscow, Yerevan, Riyadh, Manama, Dubai, Doha, Amman, Istanbul, Alexandria, Cairo, Najaf, Tehran, Tbilisi and Sarajevo.

 

In addition to these efforts, Jazeera Airways converted its Park & Fly facility into the first drive-through virus testing center in Kuwait for the use of the Ministry of Health. A second drive-through testing facility was also constructed by the Jazeera Airways team at the Jaber Al-Ahmad national stadium.

 

By the end of June, Jazeera Airways granted 50,000 free round-trip tickets to frontline heroes fighting the Covid-19 pandemic in the State of Kuwait.

 

Outlook

 

Jazeera Airways’ Chairman concluded: “The high demand for travel to and from Kuwait will always be there and our passengers will want to travel as soon as restrictions are lifted. We expect travel to gradually return to its pre-2019 levels starting from the second half of 2021. The focus of Jazeera’s board and management now is to come out of this global situation stronger than when it started and active steps are being taken to achieve that goal. Jazeera Airways will be announcing several new launches in the coming few months and will take delivery of four new aircraft during 2021 that will complement the company’s expanding fleet and network growth.”

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