Jordan must support airline like other countries, CEO says

A Royal Jordanian Airlines Embraer ERJ-195AR aircraft waits for take-off on the runway at Cairo airport, Egypt on July 13, 2016. REUTERS / Amr Abdallah Dalsh

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AMMAN, December 22 (Reuters) – Jordan risks the collapse of the national airline Royal Jordanian unless it offers financial aid like other countries have done for carriers, its director said on Wednesday. general.

“Every airline has received aid from their government except us,” CEO Samer Majali told Reuters.

“The government has been reluctant to provide the aid due to the enormous burden on the budget,” said Majali, who returned to duty in April after a 12-year hiatus to lead the carrier through the pandemic, after having resisted regional upheavals for more than 50 years.

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The only financial aid Royal Jordanian had received was a 50 million dinar ($ 71 million) cash injection last year, approved long before the pandemic, Majali said.

“The half-baked, temporary patchwork solutions won’t work. Either there is a serious investment in RJ or the airline has no chance of survival,” he added.

Services to most of its destinations have resumed, putting the airline – which indirectly contributes more than $ 1 billion to the economy – on track to cut losses by 55% this year and break even in 2023, said Majali. But investments were needed.

“What is needed now is an investment in the airline… But a decision must be made soon,” said Majali.

He said about 70% of the company’s 250 million dinars ($ 350 million) of accumulated debt came from the immobilization of its fleet last year.

Profitable before the pandemic, it was the first Arab airline to be privatized in 2007, although the government later took over a majority stake through a series of capital increases.

Majali said the government had recouped most of the financial aid it gave the company in 20 years through the lucrative profits from privatization that went into the state coffers.

It pays around 70 million dinars a year to the state in taxes, royalties and concessions, said Majali.

The airline has put in place a five-year recovery plan to increase destinations to 60 from the current 35 and modernize its fleet. It issued a tender last October for 30 narrow-body and regional jets to replace its current 17 planes in this category, Majali said.

This was at the heart of a strategy to transform the airline into a hub for the Levant region by expanding its regional network amid forecasts of a booming demand for air passengers in the Middle East over the years. coming years.

It assesses bids from leasing companies and engine manufacturers, Majali added.

($ 1 = 0.7080 Jordanian dinars)

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Reporting by Suleiman Al-Khalidi; Editing by David Holmes

Our Standards: Thomson Reuters Trust Principles.

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