Royal Jordanian holds virtual AGM; issues the financial results of 2023

RJ held its ordinary Annual General Meeting virtually on April 29, 2024. The meeting chaired by RJ’s Board of Directors Chairman Said Darwazeh; was attended by Vice Chairman/CEO Samer Majali, RJ board members, Companies’ General Controller Deputy, representatives of the Government Investments Management Company, RJ accounts auditor Ernst and Young and some shareholders and RJ employees.

The AGM discussed the board’s report on the financial results of 2023 and the business plan for 2024, as well as the auditors’ report, budget, and profits and losses. The General Assembly members approved all the discussed articles.

Addressing the shareholders, Darwazeh emphasized RJ’s key role as Jordan’s national carrier, underscoring its significance to the national economy and local air transportation sector. He expressed gratitude for the support received from the Royal family and the government, highlighting their contributions to RJ’s sustained performance and growth, enabling the airline to fulfill its responsibilities as a driver of the national economy, an employer of choice, and a leading contributor to the local.

He added that the important achievements attained in 2023 were built on the progress already made by RJ in the course of its 60 years of history, time during which the airline has worked hard to earn the deserved appreciation and trust that it is capable of shouldering its responsibilities and carrying out its duties with professionalism and efficiency.  The airline, the flag carrier of the Hashemite Kingdom of Jordan, was capable to overcome several challenges and difficulties in the past years; the difficulties were compounded by the corona pandemic, the war on Gaza and geopolitical situation in the region. The resulting hardships made the company exert utmost efforts to maintain its prestigious position among competing airlines, and continue to work according to international best practices.

Darwazeh said Royal Jordanian has proceeded with the largest investment decision in its history: to modernize and expand its fleet of narrow- and wide-bodied aircraft, which will number 41 by the end of 2028. He added that RJ is bound to reap the fruits of this investment, including improved services and the introduction of a new generation, fuel-efficient aircraft, while reducing operating costs and maximizing passenger satisfaction. The modernization plan includes the introduction of modern E2 regional jets, Airbus A320neo and Boeing 787-9 aircraft. As for the route network, the company intends to reach 60 international destinations; in 2023, RJ started operating new services to Bahrain, Algiers, Brussels, Stockholm and Düsseldorf.

Samer Majali said that in 2023, Royal Jordanian sought to achieve operational and financial growth, develop the company, and improve its performance indicators, as the financial results showed an increase in operating revenues by 20%, reaching JD733.3 million, compared to JD612.8 million in 2022. The passenger numbers transported by the company in 2023 increased by 18%. The increase originated mainly from the US, Europe and the Levant; Royal Jordanian fleet transported 3.6 million passengers, compared to 3 million passengers in 2022, which led to an increase in the seat load factor to 77.9%. Royal Jordanian achieved net profits of JD10.8 million during the first nine months of 2023, compared to a loss of JD71.6 million for the same period in 2022, with expectations at the time that this profit would grow by the end of 2023. However, the results of the fourth quarter of 2023 were greatly affected by the war on Gaza, which led to a decrease in the travel demand to Jordan and consequently a decrease in the company’s revenues in this quarter by about JD40 million than expected, resulting in a net loss in 2023 amounting to JD8.7 million compared to a net loss of JD78.9 million in 2022, thanks to the company’s efforts to reduce costs and control expenses to maintain the positive results and record performance that have been achieved.

Majali pointed out that Royal Jordanian completed the capital restructuring procedures during the fourth quarter of 2023, in line with the requirements of Article 266 of Companies Law No. 22 of 1997 and its amendments, by amortizing JD201 million from the balance of accumulated losses and amortizing the value of the mandatory reserve, and increasing the company’s capital by JD240 million (JD170 million by coming to own shares of the Jordan Airports Company, and JD70 million payments on the capital account).

He added that the growth plan pursued by Royal Jordanian aims to maintain the company’s position as a leading airline in the region, and increase revenues through economic and operational activity, as well as through investment, including in the aviation support entities.

As part of this clear and ambitious strategy, RJ acquired 100% of the capital of the Jordan Airline and Simulation Training (JATS) in 2023 and came to own 90% of the capital of the Jordan Airports Company in exchange for issuing shares to the Jordanian government (Government Investment Management Company), which will contribute to strengthening the relationship with the various supporting companies and their investment vision.

Royal Jordanian also looks forward to completing the project of modernizing and expanding the air cargo warehouse, which will positively support its strategy to enhance Jordan’s position as the logistics hub and commercial gateway to this region. Cargo is considered an enabler of growth of the economy of the Kingdom, in general, and of the company, in particular, and a facilitator of the movement of goods between Jordan and countries of the world.

Majali said that Royal Jordanian is currently pursuing a strategy that supports national efforts aimed at promoting Jordan as a tourist destination. An important driver and enabler of RJ’s development is the Economic Modernization Vision, which was launched by His Majesty King Abdullah, among whose objectives is “Destination Jordan” that heavily hinges on the tourism industry and holds significant potential since Jordan is known for the diversity of its religious, historical and ecological sites, as well as for its medical tourism. As the flag carrier of Jordan and a main driver of the tourism and freighting sectors, RJ has a significant contribution to the country’s GDP and to developing the Jordanian product on par with international standards and practices.