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Kuwaiti low-cost carrier Jazeera Airways produced a lower HY1 profit but attributes this to the very strong demand witnessed in the same period of last year. Overall, the airline is most happy with the high demand for air travel and high load factors.
Jazeera reported KD 6.272 million net profit for HY1 on August 7 compared to KD 7.390 million in the first six months of 2022. The airline notes that it benefitted from a one-off gain of KD 1.73 million on the sale and leaseback of engines.
Revenues increased to KD 97.853 million from KD 77.613 million, but the operating expenses also increased to KD 84.173 million from KD 64.291 million. Including other expenses and finance costs, the effect is an operating result before tax of KD 6.585 million versus KD 7.757 million. The EBITDAR margin was 17.37 percent. Cash flow from operating activities was KD 6.585 million.
Jazeera carried 40.9 percent more passengers at 2.1 million (up from 1.5 million) and at a load factor up 4.1 percent to 78.1 percent. With 1.1 million passengers carried in Q1, this makes one million in Q2. Yields were down by 10.5 percent to KD 42.83 cents.
Jazeera’s Q2 profit was up to KD 3.955 million from KD 3.546 million as revenues increased to KD 49.527 million from KD 41.872 million. Operating expenses grew to KD 41.597 million from KD 35.383 million. The operating result before tax for April-June was KD 4.146 million, up from 3.716 million. By comparison, the Q1 net profit was KD 2.31 million and KD 20.1 million in 2022.
During the quarter, Jazeera Airways grew the network by adding direct flights to Moscow, Samarkand, Larnaca, Shiraz, Belgrade, Tirana, Tivat, and Sphinx International Airport in Cairo. This makes it the seventh destination in Egypt. During HY2, the carrier will announce more new leisure and business destinations. It launched direct services to Islamabad and Tehran in July.
By June, the airline had KD 16 million in cash and cash equivalents, down for KD 29.6 million in December. Over HY1, Jazeera will pay KD 6.16 million in interim dividends to shareholders or 2.8 fils per share.
During Q2, Jazeera grew its fleet with two Airbus A320ceos’s to 21 aircraft, including ten A320ceo’s and eleven A320neo’s. Three more aircraft will join the carrier before the end of the year, but it’s not clear if these will be ceo’s to make up for delivery delays or more neo’s. Jazeera has orders with Airbus for twenty A320neo’s and eight A321neo’s.
Jazeera is about to launch an extensive cabin modernization plan and will retrofit 2.000 seats in eleven aircraft with seats from French company Expliseat. These are said to be the lightest in the industry and will save 1.200 kilograms per aircraft and hence fuel and emissions. Jazeera said in May that the retrofit is planned for 2024 and includes nine A320ceo’s, one A320neo, and two A321ceo’s.Â
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