Royal Jordanian (RJ) will review its fleet size and reduce its network as part of a series of measures to counter the sharp increase in fuel prices and falling demand due to unrest in the region and the euro zone crisis.
The Amman-based carrier will reduce frequencies on seven routes to Rome Fiumicino, Vienna, Zurich, Geneva, Amsterdam, Colombo and Khartoum and will suspend operations to five destinations. Brussels, Munich and Alain will be pulled in March and April, and two other destinations in the Gulf area will be closed later in the year. RJ said the decision was based on the performance and economic feasibility of these routes; more capacity cuts will follow depending on booking levels.
RJ said it will implement a hiring freeze and increase staff productivity levels this year. Although the carrier will maintain a “tight control on all aspects of capital expenditure,” it emphasized passenger service levels will not be affected.
RJ president and CEO Hussein Dabbas said the company also based its cost-cutting decisions on the declining tourism to Jordan and the Middle East in the first quarter.
He said the carrier’s financial results were “adversely affected” in 2011 due to the constant increase in fuel prices, leading to a 20% hike in operating costs. Revenues increased only 6% because of falling demand, canceling routes and decreasing frequencies in the Arab Spring.
RJ canceled more than 1,300 flights last year due to the political unrest in the region.
Dabbas said that “despite all the difficulties, the company was able to achieve positive operational results during 2011.” Passengers carried rose 6% and load factor averaged 70%. The increase in number of passengers and revenues in previous years ranged between 15% and 20%.
Article Source : ATW Daily News
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