Jazeera Airways returns to profitability in record time in 2021 with KD7.1 million

Jazeera Airways returns to profitability in record time in 2021 with KD7.1 million

Jazeera Airways returned to profitability for the year 2021, a period which continued to be affected by the Covid-19 pandemic and restrictions on travel, reporting a net profit of KD7.1 million for the year, up 126.8% from the previous year. The earnings were supported by an increase of 48.2% in the number of passengers flown, which reached 1.0 million, while load factors increased by 3.9% to 66.8% and yield increased by 28.6% to KD73.9.

Operating revenue for 2021 stood at KD80.4 million, up 94.3%, and operating profit increased by 152.2% to KD10.8 million.

The airline returned to profitability in record time during the third quarter of the year following a second year impacted by restrictions and limitations in capacity imposed on travel at Kuwait International Airport, and globally, in response to the continued spread of the Covid-19 pandemic.

Jazeera maintained the positive performance in the last quarter (Q4) of the year with a net profit of KD7.0 million, a 164.6% increase from the same quarter of 2020. Operating revenue increased by 285.5% to KD33.1 million while operating profit increased by 204.3% to KD9.3 million.

Number of passengers in Q4 increased by 476.6% to 520.2 thousand passengers, while the load factor increased by 35.2% to 74.2% and average utilisation of aircraft increased by 220.4% to 9.2 hours.  

Commenting on the results, Jazeera Airways Chairman, Marwan Boodai said: “Jazeera’s performance in 2021 is proof that its flexible and resilient business model continues to safeguard customers, employees and shareholders in times of crises. Financially, our airline took the right steps to control costs and limit cash burn, while operationally we focused on new destinations that satisfied an appetite to travel to destinations marked “Covid-safe” as well as catering to a high and latent demand for connecting flights between the Middle East, Asia and Europe.” 

Financial and Operational Highlights 

2021 Highlights:

●    Operating revenue: KD80.4 million, up 94.3%

●    Operating profit: KD10.8 million, up 152.2%

●    Net profit: KD7.1 million, up 126.8%

●    Passengers: 1.0 million, up 48.2%

●    Load factor: 66.8%, up 3.9%

●    Average utilization: 5.9 hours, up 41.1%

Q4 2021 Highlights:

●    Operating revenue: KD33.1 million, up 285.5%

●    Operating profit: KD9.3 million, up 204.3%

●    Net Profit: KD7.0 million, up 164.6%

●    Passengers: 520.2 thousand, up 476.6%

●    Load factor: 74.2%, up 35.2%

●    Average utilization: 9.2 hours, up 220.4%

Operations at Kuwait International Airport remained at limited capacity during the first nine months of the year, with restrictions imposed and direct flights suspended from 35 countries. 

The fast roll-out of vaccinations in Kuwait contributed to the ease of restriction in the second half of the year, with PCR test mandated upon departure and arrival to limit the quarantine in Kuwait. 

Speaking of the airline’s performance, Jazeera Airways Chief Executive Officer, Rohit Ramachandran, said: “The challenges that the pandemic brought about in the travel industry in 2020 also opened new opportunities for our airline: cargo operations, charter flights and connecting routes were expanded to benefit our business. We were resourceful in adapting our business operations which enabled us to get through a very difficult period and come back strongly in 2021.” 

2021 Operational Review 

Jazeera launched eight new routes in 2021, serving popular tourist and expat destinations that comprised Colombo (Sri Lanka), Addis Ababa (Ethiopia), Bishkek (Kyrgyzstan), Tashkent (Uzbekistan), Yerevan (Armenia), Antalya (Turkey) and Sarajevo (Bosnia and Herzegovina) in addition to London Heathrow airport as the first low-cost carrier (LCC) in the Middle East to operate direct flights to the airport. 

The airline also rolled out its summer schedule with favourite destinations for tourists, such as the Lebanese capital, Beirut, and other popular summer destinations including Tbilisi (Georgia), Trabzon and Bodrum (Turkey).

Jazeera also took delivery of four Airbus A320neo aircraft during the year, bringing the fleet to 17 aircraft. 

Jazeera Terminal T5 saw its second quarter of profit in Q4 2021, ending the year with a net profit of KD1.1 million, compared to a net loss of KD1.4 million in 2020. 

Fleet Order 

Jazeera placed a new fleet order with Airbus for 20 A320neos, 8 A321neos and 5 further options. The deal is valued at US$3.4 billion (KD1.3 billion). 

The order will effectively double Jazeera’s current fleet size to 35 aircraft, supporting the airline’s expansion plans to further boost its contribution to Kuwait’s travel sector. The aircraft mix aims to give Jazeera flexibility to extend its network to medium and longer haul destinations from Kuwait, offering passengers more choice to travel to popular destinations as much as underserved ones. 

Positive Outlook for 2022 and Beyond 

Boodai concluded: “We are confident that restrictions on the travel sector will only continue to ease, and traffic will return to pre-Covid-19 levels. Countries around the world have started to fully open their borders. As for Jazeera, we are looking forward to moving forward with our expansion plans, growing our network and fleet as well as our business capabilities.”

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