Jazeera Airways Airbus A320
Kuwait-based Jazeera Airways Group turned in what it described as an “exceptional” first quarter. In what is traditionally a weak quarter, net profit more than tripled compared to the year-ago period to KD3.6 million ($12.6 million).
Revenue rose 15.7% year-over-year to KD14.7 million. The group consists of Jazeera Airways and the Sahaab leasing arm. Group chairman Marwan Boodai said there was considerable scope for further growth on the airline side over the rest of the year.
He said business is being buoyed by the booming Kuwaiti economy, where people have increasing levels of disposable income and the government is pushing forward with many infrastructure projects. The public works ministry alone is due to pump some KD550 million into the economy this year, for example. Yet despite this expenditure, the government is likely to register a record budget surplus.
CFO Don Hubbard said the group’s first-quarter financing costs were down 26% compared to the year-ago period due to debt restructuring and an oversubscribed rights issue at the end of last year that raised $62 million.
Boodai said the Kuwaiti and wider Arabian Gulf markets are showing strong air traffic growth indicators. Jazeera’s first-quarter load factor was 70%; it said it is profitable when load factor is in the low-60s range.
The latest quarter’s results were achieved despite the suspension of Jazeera’s 18 weekly flights to Syria late last year. Some of that extra capacity was taken up by the introduction of a new route to Najaf, Iraq.
Boodai said the results were also achieved in the face of short-haul capacity-dumping in Kuwait by several major airlines in the region eager to secure traffic for connecting long-haul sectors through their respective hubs.
Jazeera operates seven Airbus A320s, with five more on lease through Sahaab. Two further A320s are due to arrive this year, plus another in 2014. One will be put into service with the airline over the high-demand summer season.
Boodai said Jazeera expects to go back to manufacturers around the fourth-quarter 2014 to acquire more aircraft for delivery in 2017. He declined to say which types are on Jazeera’s shopping list.