On the back of a busy summer, Kuwait’s low-cost Jazeera Airways produced favorable results in Q3 and an even stronger nine-month profit. At 1.1 million, the airline carried the highest number of passengers in a single quarter, it reported on October 31. Jazeera Airways reports strong recovery in Q3.
The 1.1 million passengers this Q3 compare to the 303.000 in Q3 2021 when Kuwait was just exiting Covid restrictions that had been imposed since March 2020 and severely hurt both Jazeera and Kuwait Airways. The load factor was up to 80.1 percent. More flying contributed to higher utilization of its nineteen Airbus aircraft, which more than doubled to 14.3 hours a day.
Q3 revenues almost doubled to KWD 63.2 million from KWD 31.7 million, with ancillary revenues doubling indeed to KWD 4.6 million. Cargo revenues were lower, however, by 34.2 percent to KWD 502.000 while those from e-commerce increased by almost 120 percent to KWD 18.5 million.
Operating expenses also increased significantly to KWD 47.1 million from KWD 13.7 million, reflecting the higher operational level but especially a 409 percent increase in fuel costs. The high expenses were eating into Jazeera’s operating result, which at KWD 16.1 million was not that much different from KWD 12.8 million in 2021. Yields were 46 percent lower to KWD 55.5. The net profit was KWD 13.3 million versus KWD 11.8 million.
For January-September, Jazeera Airways reported KWD 140.8 million in revenues (2021: KWD 47.3 million), operating expenses of KWD 114.8 million (KWD 45.7 million), and an operating profit of KWD 26 million (KWD 1.6 million). Fuel expenses increased to KWD 41.5 million. The net profit soared to KWD 20.8 million, up from just KWD 70.615 last year, translating into an operating margin of 15.45 percent. The airline ended September with KWD 55 million in liquidity and KWD 238 million in liabilities.
Jazeera’s own Terminal 5 at Kuwait International Airport produced a KWD 6.0 million profit as it handled 2.6 million passengers during the 9M period. The airline has now a 27.3 percent market share at KWI, up from 24.1 percent in the first nine months of last year. It expanded its network to Saudi Arabia with services to Abha, Hail, Taif, and Qassim. In September, Jazeera also launched its first service to Xian in China and added a second flight to Uzbekistan and Namangan. Jazeera used to operate in London Gatwick, but this service was discontinued during the pandemic. It now only offers flights to the UK in partnership with Pegasus Airlines, with a connecting flight in Istanbul.
First two owned A320neo’s have been delivered
The delivery of the first two directly ordered A320neo’s this month (main picture) has brought the fleet to nineteen aircraft, including twelve A320neo’s and eight A320ceo’s. To cater to demand, Jazeera wet-leased in capacity and extended contracts until February. The airline is one of the Gulf carriers that participate in a shuttle program to carry football fans to the FIFA World Cup in Doha (Qatar) between November 21 and December 18.
At the 2021 Dubai Airshow, Jazeera placed an order for twenty A320neo’s and eight A321neo’s. CEO Rohit Ramachandran said today that the airline is actively negotiating to add more aircraft to the fleet in 2023.
Jazeera is positive for Q4 and 2023 as demand continues to be strong and is expected to continue to rise although lower than in 2019. Corporate travel remains largely absent right now, but the carrier expects this to change in the new year. The slightly lower oil and fuel prices should have a positive effect on profits and yields.
Active as a journalist since 1987, with a background in newspapers, magazines, and a regional news station, Richard has been covering commercial aviation on a freelance basis since late 2016.
In 2022, he has gone full-time freelance. Richard has been contributing to AirInsight since December 2018. He is also writing for Airliner World and Aviation News and until July 1 2023 in a part-time role with Dutch website and magazine Luchtvaartnieuws. Twitter: @rschuur_aero.