Royal Jordanian is planning an order of 18 narrowbody jets to refresh its fleet of older aircraft as the Amman-based carrier starts to see some benefits of a five-year turnaround plan, its chief executive said.
The jet order is pending approval of the company's board in October, Stefan Pichler, chief executive of Royal Jordanian, told The National on Monday on the sidelines of an aviation conference in Dubai. The carrier is seeking to replace 15 jets and add three new aircraft to its Airbus and Embraer narrowbodies.
"We will discuss it in October with the board and hopefully then reach a conclusion and can move ahead," Mr Pichler said, declining to reveal the aircraft types to be ordered.
The carrier, which is 85 per cent government-owned, embarked on a five-year turnaround strategy in 2017 to shrink years of accumulated losses, repair its balance sheet and return to the capital market (by issuing equity to investors again), by 2021. The plan includes adding destinations and growing the fleet, adding capacity to existing routes, launching fare promotions and expanding the activities of loyalty programmes. Its narrowbody fleet includes Airbus A319, A320, A321s and Embraer E-175 and E195 jets.
The turnaround plan is starting to reap some benefits since the restructuring began in 2017, according to Mr Pichler.
"We made some good progress so far," he said. "We’re bolstering our cash position, we are decreasing our equity-to-debt ratio, so we’re getting healthy and that’s the most important measures we have right now."
Progress thus far has been driven by higher revenues, increased load factors, higher average fares and better productivity of both jets and employees, he said.
The carrier is on track to record a net profit in 2020 while its third-quarter financial results, yet to be announced, will give "further indication that we're moving in the right direction," he said, declining to provide figures.
Royal Jordanian expects to carry 3.5 million passengers this year, he said.