The Jordanian government is backing a 100 million Jordanian Dinar (JOD) (Dh518 million) cash injection for its troubled national carrier, Royal Jordanian, after losses recently forced out its chief executive.
The government will front 50 per cent of the capital needed to prop up the airline while the rest will come from private investors, said Basma Al Majali, Acting Vice President Commercial Management and Alliance at Royal Jordanian.
Al Majali was speaking to reporters on the sidelines of the International Air Transport Association (IATA) Annual General Meeting in Doha on Monday. She said the airline expects to secure financing this year, which will be used for debt repayments and to lift the company’s cash flow that has been “eaten by losses.”
Royal Jordanian successfully turned around heavy losses in 2011 with a narrow profit margin in 2012. However, last year it once again fell into the red when it declared $54.5 million in losses.
Al Majali said profitability, backed up by the JD 100 million cash injection, is expected within 24 months.
Middle East instability has hurt the ailing airline that relies on the region for 40 per cent of its business. However, Royal Jordanian is looking to stem its losses by pulling out of unprofitable routes such as Accra in Ghana while stepping up its network in the United States with additional flights to New York this summer.
“Now we’re updating our 10-year business plan and amending our route structure fleet,” Al Majali said.
In April, Royal Jordanian joined the OneWorld airline alliance that includes Qantas and Qatar Airways, among a number of other airlines.
Former chief executive executive, Amer Hadidi, stepped down in April after losses continued to hurt the airline, said Al Majali. The airline’s Chairman Nasser Lozi has stepped in to run the airline as acting chief executive.
Al Majali declined to comment on when a new chief executive would be appointed. She, however, confirmed the airline is actively looking for a replacement.
