Royal Jordanian turns a profit against the odds

Royal Jordanian made a profit of $40.6 million. Salah Malkawi for The National

In the Levant, the global downturn weighed on Royal Jordanian, with revenue passenger kilometres down 8.2 per cent and freight traffic lower still, with a 27 per cent decline. Passenger traffic contracted slightly by 1.2 per cent, or 2.6 million people. Despite a year of volatility, the airline, based in Amman, was able to report a net profit of US$40.6 million (Dh149.1m). With revenues of $850.4m, Royal Jordanian posted a profit margin of 4.7 per cent.

The airline is considered the strongest in the Levant region, having turned around its business in 2006 by cutting loss-making international routes and focusing instead on shorter, regional destinations. Royal Jordanian was the first Middle East airline to purchase the Boeing 787 Dreamliner, with the first of 11 expected in 2013. Middle East Airlines (MEA), based in Beirut, enjoyed a bumper year last year, with net income of $107.3m, positioning the airline to begin preparations for an initial public offering. The profits were attributed to falling fuel prices and growing security and political stability in the war-torn country.

One of the oldest carriers in the Middle East, with its origins going back to 1945, MEA languished for years because of the civil war in Lebanon, which pushed the airline into bankruptcy. It carried 1.5 million travellers last year, up 14 per cent from 2008. Revenue passenger kilometres grew by 12 per cent to 3.1 billion. In Israel, airlines suffered slight traffic declines. Revenues fell 21 per cent to $1.65 billion for El Al, the national flag carrier. This, together with security requirements, contributed to a net loss of $76m.

"Clearly, security costs are a big issue with El Al," said Perry Flint of Air Transport World. "There is also unrest in the region, which is never helpful to an airline that derives a large share of its revenues from tourism." Arkia, Israel's second-largest airline, suffered a 2.5 per cent decline in passenger numbers to 1.1 million, but did not disclose financial results. Syrian Arab Airlines did not participate in the survey. The carrier has been unable to purchase US-made aeroplanes because of sanctions, forcing it to consider less-popular, Russian-made Tupolev aircraft.

It had announced ambitions of buying 50 aircraft from Boeing or even Airbus, which is also blocked under the sanctions because of the high preponderance of US-made engines and components.