State seen as the saviour of Jordan’s airline
Covid-19 setbacks and new fleet require $242m in funding
Royal Jordanian Airlines is seeking about $282m in state funding to help offset revenue lost during the Covid-19 pandemic and help finance an order of new jets.
The Mideastern carrier is looking for an initial injection of $141m to see it through the first half of 2022, followed by another of the same amount later on, CEO Samer Majali said in an interview.
Royal Jordanian understands that the government has limited resources but needs assistance to remain competitive, Majali said on Thursday.
“It’s to cover the losses incurred since the second quarter of 2020 and help us bring back our network and expand and renew our fleet,” he said. “It’s less than we lost but it will be enough.”
The airline is one of many around the world to have struggled financially while lengthy coronavirus lockdowns forced the grounding of passenger planes. A number, including Middle East giant Emirates and Germany’s Lufthansa, benefited from government support to see out the crisis. Multiple borders have now reopened, but the emergence of the omicron variant has ensured industry uncertainty remains.
Royal Jordanian is nearing a decision on renewing its short-haul and regional jet fleets with an announcement likely in January, the CEO said. The requirement will be met with new aircraft sourced via a leasing firm, though some aircraft could also be purchased directly from manufacturers.
Royal Jordanian has been evaluating Airbus SE A320neo-series narrow-bodies and the Boeing 737-Max family, together with the European manufacturer’s smaller A220 model and the rival E2 regional jets from Brazil’s Embraer.
The carrier, which currently operates older A320s and Embraer planes on shorter routes, also has a requirement for more Boeing 787 wide-bodies for longer flights, though that will be tackled later, Majai said.
Royal Jordanian’s first big fleet overhaul in a decade is likely to involve 30 new aircraft, according to a request for proposals issued in October, 17 to replace older models and 13 for growth. The step is part of a five-year plan to increase the number of destinations served from 35 to 60, starting with regional locations and extending to medium and long-haul routes.
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