Kuwait-based Jazeera Airways has just announced its 2020 third-quarter results, posting an US$18 million loss. It takes the total net losses at Jazeera Airways this year to $50 million. The airline attributes the ongoing losses to continuing restrictions at Kuwait International Airport caused by COVID-19.
“The sector remains under pressure worldwide, with the Middle East particularly affected,” said Jazeera Airways Chairman, Marwan Boodai, in a statement provided to Simple Flying.
“Financially, Jazeera maintains its strict cost control measures to safeguard its
financial position and liquidity.”
Closed airport impacts on Jazeera Airways’ results
In the third quarter of 2020, Jazeera Airways flew 65,600 passengers and had an average load of 51.8%. Net operating revenue across the three months was just under $20 million. So far this year, the airline has carried 605,900 passengers and had an average load factor of 66%. In the nine months to October 31, net revenue at Jazeera Airways was $107 million.
Jazeera Airways ended the third quarter with a cash balance of $76 million.
“The situation is expected to continue until Q2 2021 with the newly imposed curfews in
Europe,” says Mr Boodai.
Jazeera Airways was hard hit by follows a five-month suspension of all commercial flights into Kuwait between March 13 to July 31. That helps explain why third-quarter loads and revenues were well under the 2020 monthly average. Those monthly average figures were bolstered by a strong start to 2020.
Limited commercial flights at Kuwait International Airport resumed on August 1.
“Jazeera Airways relocated its efforts to serve COVID-safe tourist destinations such as Turkey and Dubai, while also focusing on charter and transit flights that connect cities in Asia to others in the Middle East, which have eased restrictions earlier,” said Mr Boodai.
“We’ve seen demand from large numbers of expatriates who are returning home or are now able to return to their place of work.”
Agile and flexible airline responds well to changing conditions
Also working in Jazeera Airway’s favor is its relatively small size. It operates just 13 aircraft, all A320s. That gives it a degree of agility and flexibility to respond to changing market forces that bigger airlines in the Gulf neighborhood don’t have.
“Jazeera Airways has the advantage of a flexible model and a network that includes destinations that are in demand and underserved,” says the Chief Executive Officer, Rohit Ramachandran,
Mr Ramachandran applauded the job the airline was doing meeting charter demand, saying Jazeera Airways had done a “phenomenal job” in this market.
The airline is now concentrating on destinations across the Middle East, Europe, and South Asia. This includes launching new services to Dhaka, Oman, and Trabzon. As Marwan Boodai noted, the destinations may not be glamorous, but they are underserved, and these workhorse style routes comprise the airline’s bread and butter.
“There is always a demand for travel, and this is what we aimed to focus on,” says Mr Ramachandran.
Despite the losses this year, the Jazeera Airways’ bosses are upbeat about the airline’s prospects. They don’t expect much relief this year, but they do expect things to start improving next year. The airline says it is working closely with the Government of Kuwait and various industry stakeholders to help smooth the way for a better 2021.