Kuwait's Jazeera Airways posted an annual 12 per cent increase in second-quarter profit as growth in passenger numbers boosted revenue.
Net profit attributable to shareholders of the company for the three months to the end of June rose to 4 million Kuwaiti dinars ($13 million), Jazeera Airways said in a filing to Boursa Kuwait, where its shares are traded.
Second-quarter revenue rose more than 18 per cent year-on-year to 49.5 million dinars as the airline carried more passengers during the April-June period amid strong demand for air travel.
Jazeera Airways ferried about one million passengers during the three months, a 27 per cent increase over the same quarter last year. Load factor, a measure of how well an airline fills available seats, also inched up to more than 74 per cent in the second quarter, compared to 73 per cent in the comparative quarter of 2022.
Investment bank EFG Hermes said the net profit results beat its estimates.
“Overall a strong set of results despite yield normalisation, which were more than offset by the solid growth in passenger numbers and stronger margins. We have a 'buy' rating on the name,” EFG Hermes said in a note on Tuesday.
Demand this summer has risen sharply as passengers seek to travel abroad for holidays after a pandemic-induced travel lull. This bounce-back was evident in aviation earnings this quarter when many airlines reported high profit and healthier balance sheets.
Jazeera Airways' board of directors approved an interim cash dividend of 28 fils per share, a total of 6.16 million dinars for the first half of the year, reflecting the company’s strong cash position, it said.
The airline reported an annual 15 per cent drop in profit for the first half of this year, despite higher revenue, after a one-off gain from an engines sale and leaseback deal during the same period last year.
Net profit for the first six months of the year fell to 6.27 million Kuwaiti dinars ($20.4 million), the airline said. This came after the one-off gain of 1.73 million dinars from the airline’s sale and leaseback of engines in the first half of last year.
First-half revenue rose more than 26 per cent year-on-year to 97.8 million dinars as the airline carried more passengers amid strong demand for air travel.
Jazeera Airways carried 2.1 million passengers in the first half of the year, up 40 per cent from the same period in 2022. Load factor also increased 4.1 per cent on an annual basis to 78.1 per cent.
“As we share our positive results for the first half of 2023, we remain optimistic and confident of our performance,” said Marwan Boodai, chairman of Jazeera Airways. “Demand for travel is high and we are pleased to see that reflected in the increased passenger traffic as well as consistent load factors.”
In the second quarter of the year, Jazeera Airways expanded its network by adding direct flights to Moscow, Samarkand, Larnaca, Shiraz, Belgrade, Tirana and Tivat.
The airline also began flights from Kuwait to Sphinx International Airport in Cairo, making it Jazeera Airways' seventh destination in Egypt.
The airline took delivery of two additional aircraft and has signed an order for more than 2,000 aircraft seats to renovate its fleet.
With these new seats, each aircraft in the airline's fleet will deliver a weight saving of 1.2 metric tonnes, reduce jet fuel consumption and increase passenger capacity with an additional row of seats, it said.
Looking ahead to the second half of the year, Jazeera Airways will announce several new routes that will cater to both business and leisure travellers, it said.
By the end of the current financial year, Jazeera Airways will be adding three more aircraft to its fleet to help serve the additional destinations planned for the rest of the year, the airline said.
Jazeera Airways runs passenger and cargo flights out of its Jazeera Terminal T5 at Kuwait International Airport. The airline flies to 66 destinations in the Middle East, Central and South Asia, Africa and Europe.