RJ holds its annual general assembly meeting

AMMAN — The Royal Jordanian (RJ) on Saturday discussed the board’s report on the 2016 financial situation and the business plan for 2017, stressing the importance of increasing the company’s profitability, according to an RJ statement.

At its ordinary general assembly meeting, presided by Vice Chairman of the RJ Board of Directors Aqel Biltaji, participants also discussed the auditors’ report, RJ’s budget, profit and losses, highlighting present challenges.

Addressing the attendees, Biltaji stressed the importance of RJ as the national carrier that contributes to the kingdom’s progress and economy. 

Royal Jordanian directly contributes about 3 per cent to the gross domestic product of the kingdom, exceeding the contributions of other well-established economic sectors, he said. 

He added that over the past few years, several circumstances and challenges affected RJ’s resources and results, as well as its ability to attain the profitability desired by the shareholders and its management.

In parallel, new challenges emerged in 2016, such as the currency exchange rates that affected last year’s results, in addition to the steep competition presented by the big carriers in the region.

However; RJ is keen on implementing the government’s vision for national carrier in the coming period, particularly after the directives the prime minister gave during his visit to RJ accompanied by the government’s economic team last week, he indicated. 

He pointed out that RJ will work with different ministries and government departments to find solutions to the existing challenges and to invest in developing the RJ-owned Royal Wings and Royal Tours. 

RJ transported 3 million passengers in 2016, 80 per cent of them were either departing or visiting Jordan; thus being a driving force for tourism, investment and commercial activity in the Jordanian market. 

Chairman of the Board Said Darwazeh said the 2016 results did not conform with those sought by RJ’s management, its employees and shareholders.

The main reason for incurring a net loss of JD24.6 million has come as a result of currency devaluation of the Sudanese pound and the Egyptian pound, he indicated in his speech, distributed to the shareholders. 

In addition, losses resulted from paying JD3.5 million in compensation of voluntary staff release. Another factor that contributed to the decrease in last year’s revenues and increased the loss was the drop in ticket fares by 11 per cent, he added. 

Moreover, RJ’s operating revenues declined to JD598.3 million from JD658.1 million in 2015, because of the growing competition RJ faced in 2016 both from full-service airlines and low-cost carriers.

Darwazeh said that despite the decline in revenues, the net operating profit recorded by the company in 2016 remains an indication of RJ’s ability to maintain its competitive position and its share in the local, regional and global markets.