Jazeera Air has reported a record annual profit of $66 million in 2022, up 184% from last year on the backdrop of strong travel demand and cost-control measures. The airline reported an increase of 77% in the load factor compared to 2021.
Operating revenues for 2022 increased to KD182.116 million, up 126.5%, and operating profit increased by 148.4% to KD26.8 million. With the resumption of operations at the Kuwait International Airport (KIA), the airline built on its return to profitability in the second half of 2021.
Although overall passenger traffic at the airport dropped by 26% compared to 2019, Jazeera’s traffic grew by 19% during the same period. Passenger numbers increased by 247.5% to 3.6 million, compared to 2021.
Marwan Boodai, Jazeera Airways chairman, said: “We are extremely proud to report record annual net profits for the year 2022, the highest in the history of Jazeera Airways. In the last year, high fuel prices added approximately KD9 million to our costs. The fact that we carried 3.6 million passengers in 2022, up from 2.4 million passengers in 2019, shows the strong acceptance of our business model and growing service by our customers. With our growing fleet, new upcoming routes and planned enhancements to our operations, 2023 is going to be another exciting year.”
In the fourth quarter of 2022, the airline reported a modest net loss of KD0.7 million, compared to a profit of KD7 million in Q4 2021. Operating revenue increased by 24.7% to KD41.3 million while operating profit decreased to KD0.9 million.
In Q4 2022, passenger numbers increased by 88% to 978.1 thousand passengers as load factor increased by 4.5% to 78.7% and average utilisation of aircraft increased by 35.3% to 12.4 hours compared to the same quarter last year.
Rohit Ramachandran, CEO of Jazeera Airways commented that he expects 2023 to be a “significantly better year than 2022”, which he said was evidenced by the strong January figures in every metric: “Strong demand, low unit costs, load factors of about 80%, healthy yields and new and current destinations are expected to shore up a very strong result in the first quarter and for the year in general,” he said, adding that he believe the airline’s low-cost model will benefit from the current macroeconomic environment.
Jazeera Airways is also currently in talks with Pratt & Whitney and CFM for an engine order.
Ramachandran, commented to media that the airline had begun “preliminary discussions” with CFM and Pratt & Whitney, but said that to to date they were “unhappy” with offers from both manufacturers. “Discussions will continue and we will use this year and part of next year to ensure we have the right terms,” he said.
The airline is hoping to finalise a decision by mid-2024 with negotiable terms and technical guarantees.
In January 2022, the airline's board approved a $3.4 billion deal to buy 28 narrowbody aircraft from Airbus after signing a preliminary agreement in November 2021.
Marwan Boodai, chair of Jazeera Airways, said: “In October 2022, Jazeera had said it would secure around $2 billion from commercial banks to fund 70% of the Airbus deal. But we are now seeking to finance only 30% of the deal with bank financing.”
The deal includes 20 A320Neos and eight A321Neos. The engine manufacturers submitted their bids after Jazeera Airways issued a request for proposals in May 2022.
Jazeera has already taken delivery of two aircraft, and will take three more this year, expanding its fleet to 22 aircraft.