Royal Jordanian CEO says war on Gaza has ‘posed major challenges’

RJ Vice Chairman/CEO Samer Majali said that the war on Gaza has posed major challenges to the air transportation and tourism industry, adversely affecting the airline’s operational performance. This sector stands as the most affected within Jordan’s economy, with a decline of 7.9% in the tourists number and a marked drop in tourism income, according to initial data issued by the Central Bank for the first half of this year compared to the same period in 2023.

The company’s financial results for the first half of this year showed a loss of JD27 million, compared to a loss of US$24 million (JD17 million) for the same period in 2023. The RJ fleet transported 1.757 million passengers in the first six months of this year. Majali indicated that first-half results are generally weaker for airlines, and that the current results are line with the budget estimates or even better for this period of the year, and close to the results of the first half of 2023, despite the challenging conditions.

Majali further explained that the war on Gaza negatively impacted travel, given the fact that Royal Jordanian is a key carrier for inbound tourism to Jordan. The war has led to a considerable drop in bookings- particularly from the Palestinian market, the West Bank and the 48- Arabs. RJ has seen a decline in the demand for travel and tourist groups, considering that Jordan is a gateway to the Levant region, as evidence of which is the exit of foreign airlines from operating to Jordan and reducing their operations. As the war continues, it is anticipated that the number of passengers may further decline, potentially affecting the financial results for the third quarter and the results of the second half of this year. 

Majali explained that Royal Jordanian exerts great efforts to reduce cost and control expenses and open new routes that attract tourists to compensate for the decline in the number of travellers from traditional markets. RJ also cooperates with local authorities to project Jordan to the world with innovation; all of this aims to maintain the positive results and profits achieved by the company during the first nine months of 2023, but unfortunately the airline was unable to mitigate the losses, resulting in numbers that did not meet the desired outcome. 

Majali stressed the need for joint efforts on a national level to support the air transportation and tourism sector in Jordan, with the contribution of both the public and private sectors. These efforts are needed to market Jordan, bring in more tourists, and propose urgent solutions to this crisis, which resembles that of COVID 19, but with a regional impact on the Jordanian tourism sector, due to the geographical location that’s close to the war area.

He pointed out that Royal Jordanian always stands by the people of Gaza and provides them with all needed support within the available capabilities through its social responsibility programs, including donations to transport humanitarian aid, and providing special or complimentary freighting rates to humanitarian organisations to deliver donations and medical supplies to those in need.

Majali highlighted that the company made significant progress in its fleet modernisation plan during the first half of this year. This included the addition of four new Embraer E2 regional jets, and the introduction of a new Airbus 321 freighter. Another Embraer aircraft is expected to join the fleet in August, along with three new A320 neo aircraft at the end of this year, coinciding with the retirement of a number of aircraft in that period. Royal Jordanian also launched several key destinations, including London Stansted, Manchester, seasonal service to Al-Ula in Saudi Arabia and Paphos. Moreover, the airline plans to expand into more markets later this year, with further announcements to follow.