Royal Jordanian Airlines is continuing to feel the impact of lost tourism resulting from the ongoing Israeli-Gaza conflict which stymied its hopes of returning to the black last year.
The Oneworld carrier had been on track to record its first net profit since 2019 after the first nine months of the year before fresh conflict broke out between Israel and Hamas.
“We were projecting [a profit of] JD15 million ($21 million) by the end of the year. Then this Gaza thing happened and unfortunately we ended up with a loss of $8 million,” said Royal Jordanian chief executive Samer Majali, speaking to FlightGlobal on the sidelines of the IATA AGM in Dubai in June. “On a turnover of a billion its not a great loss, but psychologically it was.”
”This year we are not sure either,” he says, citing the continuing impact of the conflict and noting the situation is exacerbated by a number of western government travel advisories on states in the region. ”It really is detrimental because we rely so much on tourism, people go elsewhere.”
Majali adds: “The impact is big, especially on tourism coming into Jordan. We lost huge amounts of traffic. So we are trying to compensate a little bit, but it is not easy. Entertainment, discretionary tourism is very fickle, so it’s a problem.”
Even a resolution to the conflict would not bring an immediate improvement, as there is a lag in how long its takes tourism to return. ”European tourism its about six months,” estimates Majali. ”Now they are booking for the final half of the year, so if the outlook isn’t good, they won’t book. The problem with tourism, especially entertainment tourism, is it’s very long-range and discretionary, while other bits of tourism are not.”
The airline has been boosted by the arrival of first new jets under a wide-ranging fleet renewal and expansion. It is taking 15 A320neo-family jets, eight Embraer E2-family jets and seven Boeing 787-8s
Royal Jordanian has already taken delivery of three Embraer jets with another being delivered this month and a fifth in July. It will also take delivery of its first three A320neos by the end of the year.
”Next year we have 17 coming in, mainly Airbuses, a couple of 787s and Embraer, so the main year of change will be next year, ” says Majali. ”For every three that come in, two go out. So we are replacing and growing at the same time. By the end of 2025, the bulk of the Royal Jordanian fleet will be brand new.
”We hope that Boeing and Airbus don’t delay us further. We’ve had Boeing delays, Airbus delays, but down the line we should be OK. We’ve managed the first phase of delays, we’ve extended some of the older airplanes.”
