Kuwait's Jazeera Airways swung to a second-quarter loss as passenger traffic declined because of the Covid-19 pandemic.
The budget carrier posted a net loss of 3.9 million Kuwaiti dinars (Dh46.8m) in three months to June 30, compared to a net profit of 4.8m dinars in the same quarter last year, it said in a statement on Wednesday. Second quarter operating revenue plummeted 70 per cent to 7.7m dinars.
“2020 is without a doubt an exceptional year with the impact of the Covid-19 pandemic affecting every sector of the economy, and to the largest extent, the travel and tourism sector worldwide,” Marwan Boodai, Jazeera Airways' chairman, said.
The global aviation sector has been one of the worst hit during the Covid-19 pandemic as travel came to a near-standstill, forcing cash-strapped airlines to seek government rescue packages and to lay off or furlough employees.
The Kuwait-listed airline carried 43,800 passengers in the second quarter, fewer than the 549,000 passengers in the same quarter last year.
Its quarterly load factor – a measure of how well an airline is filling available seats – stood at 44.3 per cent compared with 77.6 per cent in the second quarter of 2019.
Commercial flights at Kuwait International Airport were suspended for nearly five months from March 13 to July 31 as part of measures to curb the spread of the virus. During the suspension, the airline mainly operated cargo, charter and repatriation flights.
The airline took measures to ensure business continuity and preserve cash during the crisis. This included suspending the 2019 dividend payment, drawing down on previously untapped bank facilities and re-negotiating costs with its suppliers, Mr Boodai said.
"Aggressive controls and elimination of fixed costs are underway, including the restructure of aircraft leases ... to make significant savings this year, along with ensuring the long term health of our company," he said.
By the end of the first half of 2020, the airline had a cash balance of 27.9m dinars.
The airline has a "strong" balance sheet with minimal debt and its financial reserves allow it to withstand "difficult conditions" for at least two more years, Mr Boodai said.
Scheduled passenger flights at Kuwait International Airport resumed on August 1 with limited capacity and a mandated 14-day quarantine for all incoming passengers. Jazeera Airways started operations to cities including Dubai, Riyadh, Istanbul, Bodrum and Trabzon.
“Our goal by the end of 2020 is not the bottom line, but our readiness for the following year," Mr Boodai said.
