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Formed in 2004 and started operations in 2005. Regional, scheduled, passenger and cargo, jet airplane services.
PO Box 29288
Kuwait International Airport
Kuwait City, State of Kuwait
The State of Kuwait was established in 1961, covers an area of 17,818 sq km, its population is 2.3 million, its capital is Kuwait City and its official language is Arabic. In recent years, it has rebuilt its infrastructure and is rebuilding its economy. Of the regions nations, only Kuwait denies voting rights to its women.
June 2004: Launched a successful Initial Public Offering (IPO), offering 70% of its capital.
August 2004: A320-214 (2183, 9K-), ex-MyTravel Denmark (PRH), Boullioun (BOU) leased.
December 2004: Expects to launch operations in February 2005, with flights to key business and leisure destinations throughout the Middle East using 2 leased A320's. Initial destinations including Dubai, Bahrain, Amman, Damascus, Beirut, & Egypt, with further expansion planned to including cities on the Indian subcontinent.
4/4 orders (October 2005) A320, 165Y.
April 2005: Selects Rockwell Collins to provide its avionics and in-flight entertainment for its 4/4 A320's.
May 2005: To obtain its Air Operators Certificate (AOC) from the United Arab Emirates (UAE) and base its jet airplane operations at Abu Dhabi, Dubai or Sharjah.
September 2005: Middle East start-up Jazeera Airways (JZI) plans to operate its first flights on November 16, Chairman and CEO Marwan Boodai confirmed. (JZI) initially will operate about 30 flights per week to Dubai, Damascus, Amman, Beirut and Bahrain. This will rise to more than 75 weekly flights with the addition of destinations in Egypt, India and Southeast Asia.
Boodai said he expects (JZI) will carry 500,000 passengers annually by early 2007 upon completion of its fleet. It has ordered eight A320s including four options and in June announced it had secured financing for the purchase of its first four A320s from a syndicate of banks comprising DVB Bank, Natexis Banques Populaires and Kuwait Finance House. The first airplane arrives around October 25, a second on November 4 and two more in June 2006.
(JZI) is a Kuwait Public Shareholding Company established in 2004 with capital of KD10 million/$34 million raised through an Initial Public Offering (IPO), making it the only privately owned airline in the Middle East. It uses the Navitaire reservation system and passengers can book online, by phone, via SMS or through travel agents. Lufthansa Technik (DLH) (LTK) has been contracted for on-site and off-site maintenance.
(JZI) will be the first local competitor to Kuwait Airways (KUW) and will end the national flag carrier's monopoly on flights to and from Kuwait. It is the latest in a string of Arabian startups: In July, Al Khayala, a luxury airline, started operations in Saudi Arabia while United Arab Emirates-based Air Arabia (ABZ), the Gulf's first budget carrier, was established in 2003 along with Etihad (EHD), based in Abu Dhabi.
A320-214 (2569, 9K-CAA), delivery.
October 2005: Kuwait-based start-up Jazeera Airways (JZI) took delivery of the first of four (CFM56-5)-powered A320s in Toulouse. The airplanes will seat 165.
An official ceremony at Airbus headquarters in Toulouse, France, was attended by members of Jazeera Airways (JZI) executive team, officials from Kuwait's Directorate General of Civil Aviation, guests, and members of the international and Arab press.
Jazeera Airways (JZI), the first private (non-subsidized) airline in Kuwait and the Middle East, will start its services on Sunday (October 30) with flight to Dubai from Kuwait, said chairman and chief executive officer Marwan Boodai.
Jazeera Airways (JZI), a Kuwait-based Low-Cost Carrier (LCC) and the first privately owned airline in the Middle East, made its inaugural flight, Kuwait City to Dubai on October 30 with an A320. The airline is expected to start services to Bahrain on November 10 and later to Damascus.
The second airplane is scheduled for delivery in November, whereas the remaining two airplanes are scheduled for delivery in June 2006.
A320-214 (2584, 9K-CAB), delivery.
November 2005: Selects Lufthansa Technik (DLH) (LTK) to support its growing fleet of A320's. Will use its Total Technical Support over the next 8 years for a minimum of 4 airplanes. The agreement covers additional airplanes joining the fleet. Help will be provided for (JZI) to set up its own European Aviation Safety Agency Part 145 certificated line maintenance base.
Jazeera Airways (JZI) ordered six additional A320s, taking its commitment to 10. The privately owned Low-Cost Carrier (LCC) launched in October with its first two A320s. The newly ordered airplanes will seat 165 in a single-class configuration and will be powered by (CFM56-5)s. "We have shown that, with the Airbus A320, we can deliver a quality product at an affordable price, and we are now looking to spread that success more widely," Jazeera Chairman and CEO, Marwan Boodai said.
$2.9 billion, 12/6 orders (July 2012) A350-800's, ALAFCO (AVF) leased.
March 2006: Jazeera Airways (JZI) will inaugurate nonstop service from Kuwait to Aleppo (Syria) on March 26th. The airline will operate an A320 on this new route.
April 2006: Jazeera Airways (JZI) will inaugurate nonstop service from Kuwait to Alexandria (Egypt) on May 1st. (JZI) will operate 4 flights a week, on (Mondays, Wednesdays, Fridays & Saturdays) using an A320.
May 2006: Jazeera Airways (JZI) launched flights from Kuwait to Alexandria and Luxor, its seventh and eighth destinations.
Kuwait Airways (KUW) and Jazeera Airways (JZI) signed an 18-month maintenance agreement covering a range of maintenance checks and work on Jazeera (JZI)'s A320 fleet.
June 2006: Jazeera Airways (JZI) will inaugurate service from Kuwait to Mumbai and New Delhi on July 1st. Flights will be operated with A320s.
India and Kuwait agreed to increase airline seats per week from Kuwait by 1,300. Kuwait Airways (KUW) will maintain its current 5,200 weekly seats, while (JZI) will operate the added 1,300. The expansion is part of a broader agreement expected to be finalized during bilateral talks scheduled for next month.
A320-214 (2792, 9K-CAC), delivery.
July 2006: Jazeera Airways (JZI) inaugurated nonstop service from Kuwait to Mumbai and now operates 5 flights a week, daily except Mondays & Thursdays, using an A320. On July 16th, frequency will increase to 6 flights a week with the addition of a Thursday flight. (JZI) inaugurated nonstop service from Kuwait to Delhi and now operates 2 flights a week, on Mondays & Thursdays, using an A320. On July 16th, the frequency will increase to 3 flights a week with the addition of a Sunday flight. (JZI) increased the frequency on its Kuwait - Alexandria route from 4 to 5 flights a week and now operates flights every day except Thursday & Sundays using an A320. (JZI) increased the frequency on its Kuwait - Damascus route from 1 to 2 flights a day. (JZI) increased the frequency on its Kuwait - Dubai route from 1 to 2 flights a day this past weekend. (JZI) increased the frequency on its Kuwait - Luxor route from 3 to 5 flights a week. Existing flights operate on Tuesdays, Thursdays, & Sundays with new flights on Wednesdays & Saturdays, all with A320s.
Adds Alexandria and Luxor to its list of destinations. It would also like to add Cairo, but is prevented by the Egyptian regulatory authorities in favor of Egyptair (EGP).
Lufthansa Technik (DLH) (LTK) was selected by (JZI) to support the (CFM56-5B2)s powering its growing fleet of A320s on a power-by-the-hour basis with a 10-year Total Engine Support agreement valued at more than >$70 million.
A320-214 (2822, 9K-CAD), delivery.
August 2006: Jazeera Airways (JZI) will launch a thrice-weekly on Mondays, Wednesdays & Fridays, Kuwait City - Cochin service August 30 with A320s. The Kuwaiti Low Cost Carrier (LCC) began operations 10 months ago and flies to 12 destinations.
October 2006: Jazeera Airways (JZI) shareholders approved the listing of the airline's shares as well as a doubling of the company's capital to $69 million, the Arab Air Carriers Organization is reporting. (JZI) intends to list on the Kuwaiti exchange in the first quarter.
January 2007: A320-214 (3016, 9K-CAE), delivery.
February 2007: Jazeera Airways (JZI) launched a second base at Dubai International (DXB) with a thrice-weekly service to Bahrain. (JZI) will add flights from (DXB) to Kuwait, Mumbai, Kochi, New Delhi, Muscat, and Salalah by March 27. "The commercial aviation sector in the Middle East, and especially the Gulf region, is picking up speed and (JZI) aims to serve this growing market through establishing multiple hubs in the Arabian Peninsula," Chairman & CEO, Marwan Boodai said.
March 2007: Starting March 26th, Kuwait - Larnaca; 2x /week - Shiraz; & 3x /week - Tehran.
Jazeera Airways (JZI) announced the submission of its application for listing on the Kuwait Stock Exchange (KSE). (JZI) Chairman & CEO, Marwan Boodai said the (KSE) has the second-highest capitalization in the Middle East, and that the application process is expected to take 6 to 8 weeks. (JZI) claims to be the only airline in the region not owned or subsidized by any government. NBK Capital is the financial adviser.
April 2007: Jazeera Airways (JZI) said it posted a +$8.7 million profit in 2006, its first full year of operations, after breaking "Middle East governments' 50-year monopoly of the aviation sector." (JZI), which applied for a listing on the Kuwait Stock Exchange last month, reported revenue of $74.5 million on passenger boardings of 600,618. Load factor was 67% LF. Its first flight was October 30, 2005. It now operates five A320s to 20 destinations through its Kuwait and Dubai hubs. It has orders for five additional A320s and options for six and is awaiting government approval of a rights issue designed to increase capital by 100%.
"In 2007 we will continue to enter high-demand cities while staying true to our five-year business plan of establishing hubs throughout the Middle East," Chairman & CEO, Marwan Boodai said.
June 2007: At the Paris Air Show, ALAFCO Aviation Lease and Finance Company (AVF) of Kuwait bought 12 A350 XWBs and seven A320s. The A350 XWB airplanes are to be leased to Jazeera Airways (JZI). (JZI) also ordered 30 A320s.
November 2007: Lufthansa (DLH) Technik extended its Total Technical Support agreement covering (CFM56-5B) thrust reversers on Jazeera Airways (JZI)'s current (five airplanes) and future A320 fleet to 10 years, adding approximately +$38 million. (JZI) placed an order for 30 A320s at the Paris Air Show.
A320-214 (3349, 9K-CAF), delivery.
January 2008: Jazeera Airways (JZI) began trading on the Kuwait Stock Exchange. (JZI) is the third Arab carrier to list shares on a regional stock exchange. Air Arabia (ABZ) staged an Initial Public Offering (IPO) in March, and is listed on the Dubai Financial Market, and Royal Jordanian (RJA) launched an (IPO) in December, and is listed on the Amman Stock Exchange.
March 2008: Private Kuwaiti carrier, Jazeera Airways (JZI) reported a +KWD2.3 million/+$8.6 million profit in 2007, level with the +$8.7 million profit earned in 2006, its first full operational year. Revenue climbed +61.2% to KWD34.7 million, but the carrier did not report costs or cite a specific reason, that the increased turnover did not boost the bottom line.
(JZI) launched a second hub in Dubai last year and transported 1.2 million passengers during the 12-month period, doubling 2006 totals. Load factor soared +12 points to 74% LF. "2007 was a great year, despite the record fuel prices," Chairman & CEO, Marwan Boodai said. "We invested heavily in growing our hubs, network operations and increased frequencies, and we saw the return on our investment in [the fourth quarter] and so far this year." (JZI) began trading on the Kuwait Stock Exchange in January. (JZI) currently operates six A320s and has 34 on order for delivery through 2014.
April 2008: "OnAir" announced that Oman Air (OMR) and Jazeera Airways (JZI) will begin offering its inflight passenger communications services. Oman (OMR) will install Mobile OnAir on seven new A330s to be delivered next year, offering the full range of in-flight connectivity, including voice, (SMS), e-mails with attachments and Internet connectivity. (JZI) will provide its passengers with OnAir's in-flight mobile phone services, including voice, (SMS), and (GPRS), starting this year. (JZI)'s six A320s flying in the Middle East will be retrofitted with OnAir equipment. It has 34 additional A320s on order that will be line-fitted.
May 2008: Jazeera Airways (JZI) reported a +KWD745,815/+$2.8 million first-quarter profit, a +42% increase from the year-ago period's result. "Our strong first quarter (Q1) results follow the major expansion strategy we pursued in 2007. We will continue to expand in the rest of 2008, bringing new routes on the back of more airplane deliveries throughout the year," Chairman & CEO, Marwan Boodai said. Revenue climbed +46% year-over-year to KWD10.8 million. (JZI) flies six A320s and has 34 airplanes on order with deliveries scheduled through 2014.
October 2008: Jazeera Airways (JZI) has partnered with NBK Capital and DVB Bank to launch a Kuwait-based aircraft lessor called Sahaab Aircraft Leasing, the companies announced. Sahaab has been capitalized at $375 million and plans to order 40 to 50 airplanes from Boeing (TBC) and Airbus (EDS) next year, according to press reports. (JZI) CEO, Marwan Boodai told "Reuters" that the low-fare airline will be Sahaab's first customer, and that "the Gulf offers plenty of growth opportunities. Cash is here."
April 2009: Jazeera Airways (JZI) is a Low Cost Carrier (LCC) operating scheduled services linking Bahrain, Dubai, Egypt, India, Iran, Jordan, Kuwait, Lebanon, Syria, and Turkey. (JZI) operates to 29 destinations with 120 routes to 16 countries.
Employees = 292.
(IATA) Code: J9. (ICAO) Code: JZR (Callsign - JAZEERA).
Parent organization/shareholders: Publicly held (70%); and the Boodai Group (30%).
Main Base: Kuwait International airport (KWI).
Hub: Dubai International airport (DXB).
International, scheduled destinations: Aleppo; Alexandria; Amman; Antalya; Assuit; Bahrain; Beirut; Damascus; Doha; Dubai; Hurghada; Isfahan; Istanbul; Jeddah; Kochi; Kuwait; Larnaca; Luxor; Maldives; Mashad; Mumbai; Muscat; New Delhi; Riyadh; Salala; Sana'a; Sharm el Sheikh; Shiraz; & Tehran.
May 2009: Jazeera Airways (JZI) earned a net profit of +KWD4.5 million/+$15.2 million in 2008, nearly double the +KWD2.3 million reported in 2007, on a +40.3% increase in operating revenue to KWD48.7 million. Chairman, Marwan Boodai said yield rose +18.5% and unit cost was down -8%. "The strategic initiative to de-leverage the business in 2008 with the sale and leaseback of some assets has strengthened our balance sheet at exactly the right time, considering the current credit crisis," he said.
(JZI), which operates eight airplanes to 25 destinations, will increase 2009 capacity by +51%. It plans to add two A320s in June and has 30 on firm order. Boodai said it plans to operate out of a secondary hub and to either acquire or establish a regional carrier this year. "We feel that we'll have the opportunity this year to at least announce our first acquisition," he was quoted as saying by "Reuters."
(JZI) lost -KWD1 million/-$3.4 million in the first quarter, reversed from a +KWD745,815 profit in the first three months of 2008, on a -7.4% decline in revenue to KWD10 million. (JZI) cited "heavy investments in our operations," which Chairman, Marwan Boodai said "were tasked with putting in place the right launchpad for our next wave of growth." It expects to take delivery of two A320s by July, bringing its fleet to 10.
June 2009: Jazeera Airways (JZI) launched flights from Kuwait City to Antalya (twice-weekly) and Hurghada (five-times-weekly).
2 A320-214s (3919, 9K-CAI; 3939, 9K-CAJ), deliveries.
July 2009: Jazeera Airways (JZI) appointed Stefan Pichler as its new CEO, replacing Andrew Cowen, who left the company after only five months.
(JZI) also commenced thrice-weekly service from Kuwait City to Isfahan, its fourth destination in Iran, aboard an A320.
September 2009: Jazeera Airways (JZI) lost -KWD1.3 million/-$4.4 million in the second quarter, widened -39.8% from the -KWD897,900 net loss reported in the year-ago period. Revenue dropped -11.5% to KWD10.1 million against a +5.6% lift in expenses to KWD11.5 million. An operating loss of -KWD1.4 million compared to a +KWD516,100 profit in the 2008 second quarter. Six-month net loss of -KWD2.2 million deepened from -KWD152,100 in the year-ago semester.
October 2009: Jazeera Airways (JZI) is recruiting pilots (FC). Applicants can view additional details on the (JZI) website: http://www.jazeeraairways.com and apply online.
November 2009: Jazeera Airways (JZI) reported a +KWD762,745/+$2.7 million third-quarter profit, down -53.2% from the +KWD1.6 million earned in the year-ago period, according to a filing with the Kuwait Stock Exchange cited by several press reports. Revenue rose +4% year-over-year to KWD15.9 million on a +65% lift in passenger numbers to 582,490. "Our performance is picking up again following the expected impact from the restructuring of our network from a dual hub operation to a single hub operation earlier in the year," CEO, Stefan Pichler told "Arabian Business," referring to the closure of its Dubai hub. "The realignment of our network and some product enhancements, such as the launch of our new (JZI) business class (C), has yielded profitability in this quarter." Nine-month loss of -KWD1.5 million was a reversal from the +KWD1.5 million profit last year.
December 2009: Jazeera Airways (JZI) will cease operating its Kuwait City (KWI) - Tehran and Dubai - Bahrain services on January 3 and its (KWI) - Mumbai route on January 4. Launch of (KWI) - Latakia service, scheduled for last week, has been postponed indefinitely and flights to Hurghada are suspended until June 2. (KWI) - Sana'a service will operate via Bahrain. (JZI) currently operates 10 A320s and is expecting an 11th in January.
January 2010: Jazeera Airways (JZI) announced a $105 million financing agreement with Natixis Transport Finance for three A320s. It currently flies 11 of the type and has 29 more on order and scheduled for delivery through 2016.
A320-214 (4162, 9K-CAK), Al Sahaab Aircraft Leasing leased.
March 2010: Jazeera Airways (JZI) reported a net loss of -KWD8.2 million/-$28.2 million in 2009, reversed from a +KWD4.5 million surplus in 2008, as it navigated what Chairman, Marwan Boodai called "a year of contradictions." Revenue slipped -5.5% to KWD46 million. Boodai said (JZI) "chose to stay the course" last year as it negotiated the economic downturn and increasing capacity in the region by focusing on boosting its market share. He claimed that by the third quarter, it was the largest operator in Kuwait. (JZI) carried more than >1.8 million passengers in 2009 and plans to launch service to Lahore, Mumbai, Delhi, Antalya, Hurghada, and Salalah this year. (JZI) currently operates to 23 destinations in 12 countries with six A320s.
June 2010: A320-214 (3656, N641VA), leased to Virgin America (VUS).
August 2010: Jazeera Airways (JZI) made a loss loss of 4.7 million dinars/$16.41 million in the second quarter. (JZI) made a loss of 1.26 million dinars in the year-earlier period.
Expectations for (JZI)’s results ranged from a profit of +100,000 dinars to a loss of -1.1 million dinars in a "Reuters" analyst survey in July. In a statement to the Kuwaiti bourse, (JZI) said it made a loss of -9.22 million dinars in the first half of the year, compared to a loss of -2.23 million dinars in the same period period of 2009.
(JZI), which aims to fly 82 routes in the Middle East within the next five years, competes with United Arab Emirates-based Air Arabia (ABZ) and Dubai-based carrier flydubai (FDB) which started operations last year.
(JZI)’s total assets grew +119.5% in the first half of the year to 167.8 million dinars.
(JZI) currently operates its 11 A320s to 18 destinations.
November 2010: Jazeera Airways (JZI) returned to profitability in the third quarter after having started a turn-around plan and integrated Sahaab Aircraft Leasing. The group made a net profit of +KD4.4 million on KD14 million in sales. (JZI) carried 365,000
passengers in the period, reaching a 70% LF load factor. Its
share of the Kuwait market was 40%. (JZI) was struggling financially earlier this year and decided to cut almost half of its previous fleet of 11 A320s. The surplus airplanes were placed with Sahaab for
leases to other airlines. Chairman, Marwan Boodai believes the turn-around plan and the additional revenues were key for the change of fortune: “Together, these initiatives successfully put (JZI) back on the road to profitability, as now we operate a profitable airline business and a profitable airplane leasing business. The fact that the (JZI) Group owns its entire fleet made this possible,” Boodai said. (JZI) started operations in 2005 and has since flown 3.9 million passengers.
February 2011: Jazeera Airways (JZI) is not currently recruiting pilots (FC). Flight crew (FC) applicants can view additional details on the company Web site and apply online.
March 2010: Jazeera Airways (JZI) CEO, Stefan Pichler (ex-Virgin Australia (VOZ)), stated that Gulf markets are over-served relative to demand, whereas other Middle Eastern markets such as the Levant region are under-served. This means Beirut is making money; Dubai is not. He said he welcomes the privatization of state-owned Kuwait Airlines (KUW), which might create a stronger local competitor but also one with rationalized capacity.
April 2011: Jazeera Airways (JZI) dealt a blow to Airbus (EDS), canceling 25 of the 40 A320s it ordered in 2007.
Chairman, Marwan Boodai said that the decision was driven by "the overcapacity we've seen in the market in 2009 and 2010, when we saw close to half the seats offered by our peers on the routes we operated were being flown empty." He added that (JZI) "might revisit this decision in the future as (EDS) introduces new A320 models to the market," likely a reference to the re-engined A320neo.
(JZI) took delivery of a new A320 in January 2010, bringing its fleet to 11 of the type, six of which it operates. It leases five A320s through its Sahaab Aircraft Leasing subsidiary, including four placed with Virgin America (VUS). (JZI) will take delivery of four A320s still on order from 2012 to 2014.
(JZI) said it earned a +KWD6.4 million/+$23.1 million net profit in the second half of 2010.
May 2011: Jazeera Airways (JZI) announced it has passed the (IATA) Operational Safety Audit (IOSA) after a six-month evaluation.
October 2011: Jazeera Airways (JZI) has captured a higher market share on summer destinations in 2011 compared to its record performance of summer 2010. It carried more than >344,000 passengers during the season and more than >780,000 passengers for the year ended August 31.
November 2011: Jazeera Airways (JZI) used airplane leasing profits to reach a 3rd quarter net profit of +$23 million, and an operating margin of almost 39%. It stated demand is strong, being helped by large government development projects and the high cost of oil, which lures riches into the Arabian Gulf. (JZI) recently downsized its fleet, staff, network and airplane order book. Also (JZI) is embarking on a new three year "strategic master plan" that involves controlling costs, keeping its network at 18 destinations, growing from five to just seven airplanes (and from six to eight in its leasing business) and issuing additional shares to raise new capital. (JZI) does not hedge fuel, denies much impact from nearby political unrest, operates in a late-booking market, and benefited from the cease of operations by local rival Wataniya (WYA) ans recent labor strife at state-owned Kuwait Airways (KUW).
December 2011: Jazeera Airways (JZI) has launched Jazeerati, a loyalty program that rewards frequent fliers with a free flight for every 10 flights flown with (JZI). The program, which applies to individuals and families, is (JZI)’s first frequent flier program.
January 2012: Jazeera Airways is recruiting Flight Crew (FC) First Officers. Applicants must hold an (ATPL) issued by any (ICAO) contracting state, be 45 years old or younger, have 1000 hrs total time (TT), a minimum of 250 hours on A320 type, and a clearance certificate from the civil aviation authority which issued the pilot license stating that the applicant has not been involved in any flight incident/accident. English proficiency is required. Interested applicants can apply online.
February 2012: Route destinations: Aleppo; Alexandria; Amman; Assiut; Bahrain; Beirut; Cairo; Damascus; Deir Ezzor; Dubai; Istanbul; Jeddah; Kuwait; Luxor; Mashhad; Riyadh; Sharm el Sheikh; and Sohad.
March 2012: What a difference two years can make. After a dismal 2009 and 2010, the Jazeera Airways (JZI) Group has spent the past 24 months undergoing one of the most comprehensive restructuring and turn-around programs in the industry, transforming its results from deep losses to record profits and marking out a clear path for a sustainable future, aided by its higher-margin Sahaab leasing division that generated 52% of profits in 2011.
Following expansion and development since (JZI) launched in October 2005, (JZI) had been forced to abandon its second base at Dubai and was struggling in its home market at Kuwait. The local market, opened up by the Kuwait government with its open skies policy, was characterized by overcapacity, low load factors and stagnant yields. During 2009, 44% of all seats operating into Kuwait were unfilled. In 2010, 51% were empty.
At the beginning of 2010, (JZI) had suffered losses in six of the previous eight quarters.
Faced with losses and an almost untenable commercial situation, (JZI) embarked on a radical shake-up of its outlook and operations. (JZI) slashed its capacity, cutting its fleet from 11 to just five airplanes. Excess capacity was redeployed into its Sahaab Leasing unit, which it acquired full ownership of in early 2010, providing stable cash-flow for the company.
Along with the fleet reduction went -30% of (JZI)’s staff and much of its route network. Loss-making routes were dropped in favor of a new, customer-optimized network of 18 destinations, based on short-haul routes around two hours flying time from Kuwait. Airplane utilization was dropped in favor of more convenient schedules, especially for the corporate market. (JZI) cancelled 25 of the 40 A320 airplanes it ordered, further evidence of its new strategy of profitability over growth.
(CEO), Stefan Pichler characterised (JZI)’s business model as “LCHR”: low-costs, high revenue. Mr Pichler said (JZI) positions itself to have a service proposition passengers are willing to pay, increasing yields. That strategy he says is more sustainable than having a proposition only of a low cost base. “There will always be a new entrant with lower costs. That’s life,” Mr Pichler said.
(JZI) moved away from “pure” (LCC) practices to hybridize its model, emphasizing to passengers free luggage allowances and a European-style business class (C) (the middle seat becomes a workspace), which Mr Pichler says is responsive to (JZI)’s targeted market. “They are more hooked on product,” he said, adding that price sensitivity is not as strong. Other (LCC)s serving the Gulf cater more heavily towards migrant workers.
Having a premium product also allowed (JZI) to access the lucrative Cairo market. Despite unrest there last year, yields are growing and profit is increasing, Mr Pichler said.
Yields at (JZI) rose almost +46% over 2011 and have almost doubled over the six quarters since the formal introduction of (JZI)’s turn around plan in mid-2010.
The yield increase at (JZI) has been linked to a number of factors by (JZI). The first is the downsizing of its A320 fleet and its tighter capacity management. Tied to this has been (JZI)’s network optimization, not only in cutting loss-making routes but also in re-timing the network to provide better customer convenience, albeit at the cost of some airplane utilization and crew optimization. (JZI) has also cited its excellent on time performance (above 95% for 2011, which it claims it the best in the Middle East) as attracting higher yielding business traffic.
By 3rd Quarter 2010 (less than six months into the turn around) (JZI) returned to profitability, reporting a net result of +KWD4.4 million, its best single operating quarter in its history, although it was boosted by its leasing division. Since then, (JZI) has reported six consecutive quarterly profits. 2011 was the most profitable in (JZI)’s history, with a net profit of +KWD10.7 million.
With a slimmed down fleet and network, (JZI) handled 1,152,000 passengers in 2011, -157,000 less than 2010. But (JZI) managed to increase 2011 revenue +35.7% year-on-year, to KWD57.8 million.
Large capacity cuts in 2010 followed by a -28% capacity cut in 2011 but passenger numbers were only down by -12%, evidence of the over-supply in capacity. Load factors rose by +7.2% points, to 65.2% LF, a figure (JZI) intends to further improve.
The capacity situation in Kuwait was also helped by the failure of Kuwait National Airways (KUW), parent of Wataniya Airways, in 2011. However, (JZI) also reported a decline in confidence in the market following the collapse of (KUW).
The short booking cycle (allowing the carrier to quickly adjust fares) has also helped yields. (JZI) also seeks to operate a majority market share on most of the routes it operates, giving it significant pricing power.
Also aiding the dramatic yield growth has been a number of enhancements to (JZI)’s product and service offerings. While (JZI) firmly remains a low cost carrier (LCC), like most (LCC)s, it has found that increasing the sophistication of its model allows it to enhance revenues. (JZI) has added new menus (rotated monthly) and expanded its free baggage allowance for both economy (Y) and business (C) passengers. It has also added a basic loyalty program. It is also enhancing its Information Technology (IT) environment to increase passenger convenience; (JZI) has become the first in Kuwait to offer web check-in and plans to roll-out a mobile booking service.
The revenue situation has not been without its downsides though. 2011 saw revenue impacted by regional unrest. In late 2010, (JZI) implemented a high-level Emergency Response Team (ERT) to allow it to react swiftly to changes in its regional markets. The (ERT) is still in place and continues to monitor the situation in Syria. (JZI) recently pulled 12 of its 18 weekly frequencies from routes to Aleppo and Damascus, redeploying it to Dubai, Jeddah and Cairo. According to Mr Boodai, these high demand alternative destinations have “flourished” and are in need of more capacity.
Cost containment has been a continual objective at (JZI). With capacity cut by -28% in 2011, non-fuel operating costs were reduced significantly. However, higher fuel prices pushed (JZI)’s fuel bill up by +KWD4.5 million, pushing overall costs for the year up +3.3% to KWD43 million.
(JZI) has no hedging policy and has not indicated it intends to implement one, relying instead on fuel surcharges to offset higher oil prices. In 2011, (zi)’s jet fuel costs were up by +37%. Fuel accounted for 35% of costs during the year.
(JZI) managed to mitigate some of the impact through fuel surcharges, as well as taking advantage of the -10% discount on jet fuel offered in Kuwait. (JZI) uplifts more than >90% of its fuel in Kuwait, indicating it typically departs Kuwait with enough fuel for the return leg to avoid paying higher foreign rates.
Also weighing on results in the final quarter was foreign exchange, with (JZI) suffering a -KWD500,000 forex loss in the final quarter, compared to a +KWD877,000 forex gain in the same quarter in 2010. However, for the full year, currency fluctuations worked in (JZI)'s favor, resulting in a +KWD768,000 addition to its net result.
The upswing was a major increase in both operating and net profit. (JZI) achieved an operating result of KWD14.9 million in 2011, compared to just 1.1 million in 2010. Its net result turned around from the -KWD2.8 million loss of 2010 to a net profit of +KWD10.6 million, including a +KWD529,000 tax gain.
Underpinning the turnaround has been the vertical integration of Sahaab Leasing into the Jazeera Airways (JZI) Group. (CEO), Marwan Boodai labelled the acquisition as an “ideal business combination,” providing steady revenue and cash flows for the business and strong profits. (CFO), Donald Hubbard said that both (JZI) and Sahaab Leasing are making good profits at “every level” and contributing to the bottom line.
In 2011, the leasing arm contributed just 12% of the Jazeera Airways (JZI) Group’s revenues, but 52% of profit before tax. The leasing market is “down” according to Mr Hubbard, and leasing rates for airplanes may be lower in 2012.
The leasing arm has 12 airplanes placed and delivered: 6 with (JZI), 4 with Virgin America (VUS) (earning it +$155 million) and two with SriLankan Airlines (LNK). The leasing arm’s fleet will remain at six in 2012 but in 2013 will take delivery of another two airplanes, taking its total to eight.
New airplanes in the group are first deployed to (JZI) with older airplanes then taken out and placed with Sahaab Leasing.
Its turnaround plan is now officially over, having achieved its goal of putting the airline on a secure financial footing, with both stable and sustainable yields and consistent profits. At the beginning of the year, (JZI) began its Strategic Master Plan (STAMP), a three-year program to ensure that the airline stays as a profit-making entity, while at the same time bringing back some growth to the airline.
Under (STAMP), Kuwait Airways (KUW) will keep its network to 18 destinations, focusing instead on adding frequency on its highest-demand and most profitable routes, while gradually building load factors.
(JZI) aims to build average passenger load factors from 66% LF in 2012 to 67% LF in 2013 and to 68% LF in 2014, better than before but still low for the region; Air Arabia (ABZ) reported an average load factor of 82% LF in 2011 and 83% LF in 2010.
Fleet growth will also be modest. (JZI) took delivery of its sixth A320 earlier this month, the sole new airplane it will accept this year. (JZI) will take delivery of just one more airplane over the three-year duration of (STAMP).
The group’s balance sheet is also healthier, with the external debt to equity ratio reduced from 5.9:1 in 2010 to 3.2:1 in 2011. Cash reserves and deposits have increased to KWD16 million, while working capital has improved to KWD12 million. With a pending rights issue to increase capital, which still awaits final regulatory approvals, and an improved balance sheet, (JZI) believes that it is adequately capitalised for the future.
While Sahaab accounted for just over half of (JZI)’s profit and at a higher margin than the airline, (JZI) expects the airline to contribute the “lions share of profit in the future”.
Mr Pichler is pleased with (JZI)’s achievements, especially considering the market (JZI) competes in. “All around you are government airlines,” he says. Having achieved quarterly and annual profitability, Mr Pichler said (JZI) now aims to be profitable every month, noting January is slow.
(JZI)’s outlook for 2012 is for mild growth over 1H2012, demand increase in 3Q2012 and then growth easing somewhat in 4Q2012. (JZI) is looking to either sustain or increase yields. It will continue to focus on cost containment, but without a fuel hedging programme fuel prices are a concern, although the government already exerts influence on fuel prices.
(JZI) has announced plans to launch services from Kuwait airport (KWI) to Iraq within the next six months after the two countries have come to an agreement settling financial claims by Kuwait for the first Gulf War in the early 1990s. It is the first Kuwaiti carrier that has been assigned traffic rights for flights to Iraq.
August 2012: The Jazeera Airways (JZI) Group recorded a half-year net profit of +KD3.8 million/+$13.5 million, up +21.8% year-over-year, despite continuing unrest in the region. Operating revenue was up +11.8% at KD28.3 million.
The Group (made up of Jazeera Airways (JZI) and leasing arm, Sahaab) gave few individual financial details, although Group (CFO) Donald Hubbard said (JZI) contributed 34% of the Group’s +KD6.4 million operating profit and Group Chairman Marwan Boodai said Sahaab was producing steady revenues and cash flows.
The lessor has a fleet of 15 A320s, with 12 delivered and placed with (JZI), Virgin America (VUS) and Sri Lankan (LNK). Sahaab’s remaining three airplanes will be delivered in 2013 - 2014.
(JZI)’s load factor remains in the 60% - 70% LF bracket, but Boodai said during a webcast that yield was more important than passenger numbers: “We’ve proved we can be profitable at load factors in the low 60 LFs,” he said.
He said fuel costs and the protracted civil war in Syria were the main problems affecting passenger numbers. The Syrian situation was also affecting flights to Lebanon, while the important route to the Egyptian capital, Cairo, was still only “moderate.”
However, he said he remained positive in his outlook for (JZI), with higher demand anticipated in the summer high season: “I’m confident we’ll achieve double-digit growth for the year.”
Jazeera Airways (JZI) has stopped its flights from Kuwait (KWI) to Aleppo International (ALP) and Deirezzor Al Jafrah (DEZ) airports following a further escalation of violence between government and rebel forces in these regions of Syria. (JZI) will, however, continue to serve Damascus (DAM) 3x-weekly. While it was the only foreign carrier serving Deirezzor (DEZ), Aleppo (ALP) continues to be served by Air Arabia (ABZ), Sharjah International ((ICAO) Code: SHJ)), Armavia (ARZ), Yerevan Zvartnots ((ICAO) Code: EVN)), EgyptAir (EGP), Cairo International (CAI)), and flydubai (FDB), besides Syrianair (SYR).
November 2012: The Jazeera Airways Group reported a 3rd-quarter net profit of +KD7.6 million/+$26.9 million, up +24.6% year-over-year. Operating revenue rose +5.9% to KD20.4 million.
The Group, which comprises Jazeera Airways (JZI) and Sahaab Leasing, said this is the best quarter in its 8-year history, despite continuing unrest in the region.
Nine-month net profit reached +KD11.4 million (more than (JZI) earned in 2011).
Jazeera Airways Group Chairman Marwan Boodai told analysts and reporters the improved figures are a sign that (JZI)’s 3-year restructuring plan—targeting enhanced yields, increased load factors and improved market share—is working.
He said the Group had reached sustained profitability despite the challenges of seasonality, rising fuel costs, and problems in Syria and elsewhere. It anticipates going ahead with a rights issue by year end after receiving approval from the Kuwaiti government.
Boodai said this quarter (JZI) operated the 1st scheduled flights between Kuwait and Iraq for 22 years. He pointed out that (JZI) passengers are now booking 10% of their reservations on iPhone and Android apps.
(CFO) Don Hubbard said (JZI) contributed 80% of the Group’s profit, despite dropping 18 weekly flights to civil war-racked Syria, a conflict that threatens to impact Lebanon. Bahrain, where the Shia majority continues to clash with the Sunni ruling family, is another concern.
Airplanes displaced from Syrian routes have been redeployed to popular sectors, including Dubai and Jeddah. Rising load factors have helped to improve the financial figures. “We can be profitable on load factors in the low 60s and very profitable with load factors of 74% [achieved] more recently,” he said.
February 2013: Jazeera Airways (JZI) reported a 2012 net profit of +KD13.9 million/+$49.3 million, up +32% from +KD10.5 million in 2011. Operating profit rose +8% to +KD62.6 million over 2011.
Jazeera Airways (JZI) Group Chairman, Marwan Boodai said the result was achieved despite the loss of revenue to the Syrian destinations of Damascus, Aleppo and Deir Ezzour for much of the year. (JZI) progressively suspended services to the troubled country as its civil war worsened.
Load factor rose +1% to 66.1% LF, and (JZI) is targeting a further increase to 67% to 68% in 2013. (JZI) is profitable with load factors in the low 60% LF range and every percentage point rise went straight to the company’s bottom line, Boodai said.
Profits were split 59% and 41% between the airline and the group’s leasing company, Sahaab. The Group intends to keep feeding older A320s from the airline’s fleet to the leasing operation as they are replaced by newer models.
The group has 12 A320s, with two more due to arrive this year and one in 2014.
He said he sees greater potential for expansion in the airline side of the business, but the leasing operation is valuable as it provided a steady cash flow to offset seasonal fluctuations in (JZI)’s traffic.
Looking forward, he said that several major infrastructure projects getting underway in Kuwait are likely to attract more inbound traffic to the emirate and higher government salaries are likely to boost outbound traffic.
Jazeera Airways ((IATA) Code: J9, based at Kuwait (KWI)) (JZI) Chairman, Marwan Boodai has told Arabian Business that (JZI) would definitely be interested in participating in the privatization of national carrier and competitor, Kuwait Airways (KUW). Any investment in (KUW) would however be dependent on the government providing a "clear and clean balance sheet" for the carrier ahead of its privatization. Kuwait plans to offer up to 80% of Kuwait Airways (KUW) shares to Kuwaiti companies, private individuals and Kuwait Airways (KUW) employees within the next three years.
Iraqi Airways ((IATA) Code: IA, based at Baghdad) is expected to operate its first commercial flight between Baghdad and Kuwait on Saturday, February 16 after a suspension of air services on the route for 22 years following the 1st Gulf war, where Iraq had invaded Kuwait. This follows an earlier move by low-cost carrier (LCC) Jazeera Airways (JZI), which had already launched a 2x-weekly A320-200 service between Kuwait and Najaf last year.
April 2013: The Jazeera Airways (JZI) Group turned in what it described as an “exceptional” 1st quarter. In what is traditionally a weak quarter, net profit more than tripled compared to the year-ago period to +KD3.6 million/+$12.6 million.
Revenue rose +15.7% year-over-year to KD14.7 million. The group consists of Jazeera Airways (JZI) and the Sahaab leasing arm. Group Chairman Marwan Boodai said there was considerable scope for further growth on the airline side over the rest of the year. He said business is being buoyed by the booming Kuwaiti economy, where people have increasing levels of disposable income and the government is pushing forward with many infrastructure projects. The Public Works Ministry alone is due to pump some KD550 million into the economy this year, for example. Yet despite this expenditure, the government is likely to register a record budget surplus.
(CFO) Don Hubbard said the group’s 1st-quarter financing costs were down -26% compared to the year-ago period due to debt restructuring and an oversubscribed rights issue at the end of last year that raised +$62 million.
Boodai said the Kuwaiti and wider Arabian Gulf markets are showing strong air traffic growth indicators. (JZI)’s 1st-quarter load factor was 70% LF; it said it is profitable when load factor is in the low-60s range.
The latest quarter’s results were achieved despite the suspension of Jazeera (JZI)’s 18 weekly flights to Syria late last year. Some of that extra capacity was taken up by the introduction of a new route to Najaf, Iraq.
Boodai said the results were also achieved in the face of short-haul capacity-dumping in Kuwait by several major airlines in the region eager to secure traffic for connecting long-haul sectors through their respective hubs.
(JZI) operates 7 A320s, with +5 more on lease through Sahaab. 2 further A320s are due to arrive this year, plus another in 2014. 1 will be put into service with (JZI) over the high-demand summer season.
Boodai said (JZI) expects to go back to manufacturers around the 4th-quarter 2014 to acquire more airplanes for delivery in 2017. He declined to say which types are on (Jzi)’s shopping list.
June 2013: Jazeera Airways ((IATA) Code: J9, based in Kuwait) (JZI) has leased out one of its 12 A320-200s (2569, 9K-CAA), to nasair (Saudi Arabia) ((IATA) Code: XY, based at Riyadh) (NAZ). According to (NAZ) (CEO), François Bouteiller, the added airplanes are part of a strategic long term plan to expand the Saudi low cost carrier (LCC)'s international route network as a means of offsetting its unprofitable Saudi domestic network, where it competes with the heavily subsidized state carrier, Saudia (SVA).
(JZI) serves 10 countries, 16 destinations, and 16 routes.
July 2013: The Jazeera Airways Group has reported its 12th consecutive profitable quarter as it announced its 2nd-quarter and 1st-half results. It posted a 2nd-quarter net profit of +KD3.9 million/+$13.7 million, up +34% compared to +KD2.9 million in the year-ago quarter. Revenue was up +3.3% to KD16 million. For the half-year, (JZI) posted a record profit of +KD7.5 million, up +95%, on revenue of KD30.8 million, up +8.8%.
"Reuters" reported that Jazeera Airways (JZI) announced that (CEO), Stefan Pichler has tendered his resignation, effective August 29. No details of his departure were given.
(JZI) operates a fleet of owned and leased 12 A320s. A further 3 A320s are due to arrive through 2014. (JZI) recorded a +32% rise in profit for its last full financial year, reaching almost $50 million despite facing problems such as the suspension of routes to Syria.
August 2013: According to FAPA.aero, Jazeera Airways (JZI) has been accepting flight crew (FC) applications, but no (FC) hiring has been announced.
October 2013: Jazeera Airways (JZI) has recorded reduced earnings in the 3rd quarter following renewed unrest in the Middle East.
(JZI) will start serving Dubai World Central (DWC) with 2x-weekly flights starting October 31.
The new route complements its current operation between Kuwait and Dubai International, which remains unchanged at an average of 25 weekly flights.
(DWC) is Dubai’s new airport scheduled to open in October and is a key component of Dubai Airports’ long-term expansion plan. The airport will start receiving passengers in October with an annual passenger capacity of 7 million. Upon completion, (DWC) should become the world’s largest airport with 5 runways and an ultimate capacity of 160 million passengers and 12 million tons of cargo per annum.
November 2013: Jazeera Airways (JZI) has become the 2nd carrier (after Wizz Air (WZZ)) to launch commercial passenger flights at Dubai Al Maktoum (DWC), with the introduction on October 31st of 2x-weekly (Thursday and Saturday) flights from Kuwait (KWI). The 860 km service will be operated by one of (JZI)’s 14 A320s, and will complement (JZI)’s on-going service to Dubai’s main airport. Last Wednesday (October 30) was the 8th anniversary of (JZI)’s 1st commercial flights, from Kuwait to Beirut and Dubai.
April 2014: Jazeera Airways (JZI) posted a 1st-quarter profit of +KD2.1 million/+$7.4 million, down -41.8% compared to +KD3.6 million in the year-ago period. (JZI) attributed the profit drop to a combination of factors. Revenue was KD13.8 million, down -6.1%.
Jazeera Airways Group Chairman Marwan Boodai said (JZI) saw a -2.1% drop in passenger numbers and a decline in average yield of KD1 as it cut fares to hold onto market share. Although the fall in passenger numbers equated to just -5,000 travelers, fares had previously gone straight to the bottom line.
Load factor was 68% LF, down from 70% LF, a year earlier. (CFO) Donald Hubbard said (JZI) was budgeting for a 70% LF load factor over 2014 as a whole. Yield figures are now rising again, he said.
(JZI) also saw costs rise following what Boodai described as substantial increases in charges by its fuel supplier at Kuwait International Airport. Fuel burn also increased because of the need for longer routings to avoid regional problem areas such as Syria.
He added that, while bookings had dipped in the 1st 2 months of the year, there had been an improvement in recent weeks; bookings for March were +8% ahead of the same month in 2013.
(JZI) hopes to improve its passenger experience in June with the opening of “Gate Jazeera,” 4 new airbridge-served gates at its Kuwait City hub. (JZI) has paid to build the new gates to overcome congestion at the airport.
Due to the continuing political unrest in Egypt resulting in fluctuating passenger loads and suspension of routes to Syria, (JZI) shifted capacity to other routes such as Jeddah and the new Dubai World Central, Boodai said.
The group is made up of the airline and its leasing arm, Sahaab, which has 6 of the group’s 14 Airbus A320s on the books of Virgin America (VUS), SriLankan (LNK) and Saudi Arabia's Nasair (NAZ). Boodai said Sahaab would announce “a major deal” with its 1st European customer, potentially within the next 2 weeks.
May 2014: Jazeera Airways (JZI), the Kuwaiti low-cost carrier (LCC), commenced a new route from its Kuwait (KWI) base, with the movement of 3x-weekly flights (Wednesdays, Fridays and Sundays) from Istanbul Sabiha Gökçen to Istanbul Atatürk (IST) on May 2nd. The 2,171 km sector to the primary airport of Istanbul will be operated utilizing (JZI)’s 165Y-seat A320s and will face direct competition from Turkish Airlines (THY)’s 3x-daily services.
Jazeera Airways (JZI) has signed a new 5-year flight planning service contract with Jeppesen, adding the Boeing Digital Aviation subsidiary's "JetPlanner" system. (JZI) is looking to use the web-based flight planning system to generate a unique fuel, time and cost performance index for more optimized routes and flight plans.
"Developing optimized flight plans that help to reduce fuel consumption based on efficient routing is a critical operational objective," said Abdulla Al-Hudaid Chief Operating Officer (COO), Jazeera Airways (JZI).
July 2014: Kuwait’s privately owned Jazeera Airways Group saw its 1st-half net profit drop to +KD4.9 million/+$17.3 million, down by nearly -35% from +KD7.5 million for the year-ago period.
1st-half revenue was KD29.3 million, down -4.9% year-over-year.
The group (which comprises hybrid carrier Jazeera Airways (JZI) and its Sahaab Aircraft Leasing attributed the lower figures to a combination of “exceptional external factors,” as well as comparison with its record-breaking 2013 1st half.
Group Chairman Marwan Boodai said those factors included the closure of Assiut Airport in Egypt from June 1 for a year-long runway resurfacing project, restrictions at Dubai International Airport (also for runway repairs) and a drop in passengers flying to Saudi Arabia due to the (MERS) respiratory virus.
The group has 15 Airbus A320s (newer airplanes operate for the airline and older airplanes are passed to Sahaab for leasing to external parties. Rates from leased airplanes also dropped during the 1st half due to older airplanes entering their 2nd-lease periods, Boodai said.
On the positive side, Sahaab achieved its 1st European leasing customer ((TAP) Portugal, which leased 2 Airbus A320s). It had also opened 4 company-funded, dedicated gates at Kuwait International Airport to ease storage space in the terminal.
(JZI)’s passenger performance is heavily seasonal, with the biggest demand coming over the 3 summer months.
Outlook for the full year was likely to be below 2013’s “exceptional” performance, but still better than that of 2012, Boodai said.
April 2015: Jazeera Airways (JZI) dipped into the red in 2014 after a loss related to the sale of its fleet of 15 Airbus A320s to a leasing company.
The Kuwaiti airline announced revenue for 2014 of KD68.8 million/$228.8 million, up +4.9% on 2013. Net profit for the year was given as +KD17.4 million (up +4.4% year-over-year [YOY]) prior to the sale. But it said that its bottom line “was affected by a one-time non-recurring loss leading to a net loss of -KD2.88 million for the year.”
The deficit is due to a difference between the value for which the assets were recorded in the company’s books and the value for which they were sold.
As a result of the fleet sale transaction to a UK-Chinese joint venture (JV), the Jazeera Airways Group will receive KD 148.5 million in cash. The proceeds will be used to settle all of the company’s outstanding debt, amounting to KD 116.6 million as of the end of 2014. Next year, the company will divest KD20 million in a special dividend to shareholders and spend up to a further KD30 million in a share buy-back.
By the end of the 2015 financial year, (JZI) will be debt-free and will have cash and capital balances above its future needs, said Jazeera Airways Group Chairman, Marwan Boodai. The company aims to reduce its current capital from KD42 million to KD20 million and reduce its cash balance from more than >KD80 million to KD35 million. It will aim to maintain the latter figure in future years.
Boodai said he was optimistic about prospects for next year and hoped that the region (currently racked by civil wars in several countries) would become more settled. He added that (JZI) was targeting double-digit growth in profitability for the coming 3 years.
Seven of (JZI)’s A320s are operated by (JZI) itself, while the remaining 8 are already leased out to other carriers. Following the sale transaction, (JZI) will lease back its 7 airplanes.
Jazeera (JZI) has been talking for some time about a purchase of new airplanes, but Boodai indicated that this decision had been pushed back. “We don’t expect to announce any orders any time soon. We have a fairly young fleet and they are well-positioned to carry us forward,” Boodai said.
(JZI)’s full-year load factor dropped -0.1% (YOY) to 68.3% LF.
May 2015: Jazeera Airways (JZI) will build its own dedicated terminal at the Persian Gulf nation’s international airport, to improve the passenger experience.
The company is in the final stages of negotiations with the Kuwaiti government over the new facility, which will adjoin the existing building and will be a “major investment” of around KD10 million/$33 million for the company, Jazeera Airways Group Chairman, Marwan Boodai said during the company’s first-quarter results presentation.
(JZI) has already built 4 jetways for its sole use at the airport to ease overcrowding. A new main terminal is not expected to be constructed for at least 10 years, said Boodai, which is why (JZI) has decided to construct its own building. The new facility will be a “design and execute” contract undertaken by an international construction group.
“In the foreseeable future, (JZI) will be spending more on the ground than in the air. We feel that’s where we can get a competitive edge,” he added.
Another factor behind (JZI)’s decision to strike out on its own is its belief of continuing growth in the Emirate, which has one of the world’s highest per capita incomes. “Market demand is huge here in Kuwait,” Boodai said.
Group 1st-quarter net profit (traditionally a quiet period) was up +44.6% at KD3 million compared to a year ago, on operating revenues up +3.5% at KD12.9 million.
Load factor was up +4% at 71% LF. Fuel accounted for 23% of expenses, compared to 29% a year ago. Yields have dropped by about -3%, due to increased capacity in the marketplace from both existing competitors and new entrants.
June 2015: Kuwait’s privately owned Jazeera Airways (JZI) is bidding for a stake in government-owned Kuwait Airways (KUW) as part of the privatization process.
(JZI) has formally submitted a letter of intent (LOI) to acquire 35% of Kuwait Airways (KUW), which is being privatized by the government of Kuwait. The 35% stake is the maximum allowed by a single private investor as stipulated under the privatization rules.
(JZI) Chairman Marwan Boodai said: “Today, we launch our bid for the acquisition of 35% of Kuwait Airways (KUW), armed with a vision to grow (KUW) into a leading airline that meets the ambitions of the Kuwaitis and travelers across the world. As witnessed in airline privatization exercises over the last 50 years, we believe an efficiently run (KUW) with a private sector management approach, benefits all stakeholders, especially employees who will be presented with an opportunity to transform and grow the airline into one that travelers seek as a 1st choice rather than a last resort.”
The privatization of Kuwait Airways (KUW), one of the oldest airlines in the Middle East, will be the 1st privatization undertaken by the Kuwaiti government that exceeds the 3 billion dollar mark.
“Ultimately, we are bidding for Kuwait Airways (KUW) because we believe in the Kuwaiti economy and in the talents within the organization,” said Boodai. “We believe (KUW) should operate as an organization that rewards employees for commitment and innovation, and should we succeed in winning the bid, (KUW) employees will be the reason why we succeed in transforming the airline.”
Operating since 2005, Jazeera Airways (JZI) maintains it was the 1st 100% privately owned airline in the Middle East and remains one of a handful of non-government owned airlines in the region.
July 2015: "Jazeera Airways (JZI) (1H) Net Profit up 27%" by (ATW) Alan Dron, July 30, 2015.
Jazeera Airways (JZI) turned in a group net profit of +KD6.2 million/+$20.5 million for the 1st half of 2015, up +27.1% from +KD4.9 million last time.
Revenue was up by +0.8% at KD26.6 million. The privately owned carrier said capacity rose +1.3% and passenger numbers were up +5.5%. Load factor rose +4.1% to 70.1% LF.
(CFO) Don Hubbard said (JZI) turned in another strong performance, despite the continuing turmoil in regional markets such as Syria and Iraq, together with increased competition at Jazeera’s home hub, and what he described as “increasing capacity being dumped there.” Much of this capacity is being used by other Gulf carriers to try to drag long-haul traffic to their own hubs for onward connections.
This increased competition led to a -4.4% drop in yield compared to the year-ago period, Hubbard said, but this was offset by increasing passenger numbers.
Overall operating costs dropped by around -6%, mainly due to the continuing reduction in fuel costs. Fuel costs accounted for 23% of (JZI)’s total expenditure over the period, compared to 31% a year ago.
(JZI) does not hedge its fuel costs and uplifted 85% of its requirements in the emirate in the 1st 6 months of the year.
Group Chairman, Marwan Boodai said (JZI) was “delighted” by the recent agreement between Iran and the international community over the former’s nuclear ambitions, which will see sanctions against Tehran being lifted. “We believe this could open up new opportunities for regional carriers like Jazeera (JZI). Iran is a big market and we’re very bullish about expanding into that area in the future. We believe this market will open up in a major way. We intend to be a major player [there].”
(JZI) has previously entered a bid for 35% of the shares in faltering national flag carrier Kuwait Airways (KUW), which is due to be privatized.
Recent reports have indicated the Kuwaiti government is backing down from this plan and may sell just 25% of the airline’s shares. However, Boodai believed the Kuwaiti government had not walked away from the original plan to sell a majority shareholding in the national carrier.
“We’ve always said that a strong Kuwait Airways (KUW) is good for us; we’re not a direct competitor.”
October 2015: Jazeera Airways (JZI) has received shareholder approval to cut its capital by more than a half, as it adjusts from having closed its airline leasing business.
At an extraordinary general meeting in Kuwait on October 12, shareholders approved a board recommendation to cut the hybrid airline’s capital from KD42 million/$139 million to KD20 million through a share buyback program.
The company will buy back 220 million shares at the nominal share price of 100 fils (one-tenth of a Kuwaiti dinar), resulting in a KD22 million shareholder payout. This follows a KD20 million special dividends payout in June, together with KD10.7 million in 2015 accumulated earnings and other reserves that are required by law to be distributed as part of the capital reduction.
The share buyback brings the company’s total payout to shareholders this year to KD52.7 million.
In January 2015, (JZI) announced it was selling off its entire fleet to lessors and would close its own leasing arm. “Today’s shareholder approval to adjust the company’s capital, is the last step of the company’s successful strategic exit from the capital-intensive aircraft leasing business earlier in the year,” Jazeera Airways (JZI) Chairman, Marwan Boodai said.
“Going forward, our focus will be on the growth opportunities available in our home market within the passenger airline business, which generated over >80% of the company’s net profit last year. We believe that passenger airline business in Kuwait will continue to grow strong, and we are well prepared to take advantage of this growth.”
The capital reduction process will also include the settlement of all debts held by the company, resulting in a debt-free company by year end.
The small carrier has been turning in steadily climbing profits in recent years and has embarked on plans to build dedicated jetways and a separate terminal at the crowded Kuwait International Airport.
February 2016: Jazeera Airways (JZI) posted a net profit of +KD15.4 million/+$51.3 million for 2015, reversed from a loss of -KD2.8 million in 2014. The 2014 figure was skewed by a major restructuring of (JZI) that saw it undergoing a sale and leaseback of its fleet to an external lessor.
The latest profit was made on revenue of KD58.6 million, down -6.2% compared to 2014’s figure of KD62.5 million. Passenger numbers rose +4.5% to 1.22 million, up from 1.17 million last time, while capacity rose +3.5% and load factor climbed +1% to 69% LF.
The increase in capacity was due to better utilization of (JZI)’s fleet of seven Airbus A320s. One more A320 may be added next year, depending on passenger loads, (JZI) said on February 8.
Plummeting oil prices meant that fuel dropped to 22% of operating costs compared to 31% for the previous year. “We had a fantastic year and have a very strong position for 2016,” Jazeera Group Chairman Marwan Boodai said.
He announced that (JZI)’s plans for the coming year include a new business (C)-class lounge at Kuwait International Airport.
The airport’s increasing congestion means Jazeera (JZI) will also create a new off-site check-in facility from which passengers and baggage would be transported to the airport, he said.
Both new facilities are due to launch in (3Q) 2016. Such improvements in the passenger experience means (JZI) believes it could raise load factors to the mid-70s over the next few years, he added.
(JZI) is building a new, dedicated passenger terminal as a longer-term solution to the overcrowding problem.
Recent disputes between neighboring Saudi Arabia and Iran have seen Saudi Arabia, Bahrain, and the United Arab Emirates (UAE) cut air links with Iran, but Kuwait’s links remain in place.
(JZI) operates to a single Iranian destination, Mashhad, but Boodai said he anticipates more transit traffic through Kuwait to Iran this year (a possible indication that residents from the western side of the Gulf may make their way to Iranian destinations, via Kuwait). Another, seasonal, Iranian route is likely to be announced shortly, he said.
April 2016: Kuwaiti hybrid carrier, Jazeera Airways (JZI) will be the launch customer for a new-generation broadband Internet system from Rockwell Collins, (JZI) said as it unveiled its (1Q) figures.
The new system will be installed from (1Q) 2017 and will allow passengers to live stream television shows, films, news or sports on any personal device.
(JZI) made a net profit of +KD4 million/+$13.3 million, up +33% on (1Q) 2015’s figure of KD3 million. Operating revenue was down -7.8% to KD11.9 compared to the year-ago quarter.
The net profit figure was somewhat skewed by an after-effect of the decision to get out of the leasing business. As a result, (JZI)’s subsidiary, Sahaab Leasing, changed its functional currency from USA dollars to Kuwaiti dinars. This meant that accumulated foreign currency translation reserves worth KD2.4 million could be reclassified, giving a one-off boost to the (1Q) figures.
The former leasing subsidiary is also changing its name to Sahaab Aviation Services and will in the future be used to develop a range of aviation-related products or activities.
Capacity rose 2.6% compared to a year ago. Load factor rose from 69.7% a year ago to 72.6% for the most recent quarter. Overall fuel costs dropped -37% over the same period last year, with fuel accounting for just 15% of costs for (1Q) 2016, compared to 23% in the year-ago period.
(CFO) Don Hubbard said (JZI) had experienced pressure on yields as a result of overcapacity in the region and subsequent highly competitive pricing. Yields dropped -12%, offset 5.1% because of a passenger increase.
The problem of overcapacity has existed for some time and (JZI) is fighting this partly by making the overall travel experience more pleasant for passengers, Jazeera Airways Group Chairman, Marwan Boodai said. “We are investing in the ground as much as in the air,” he said, noting a string of initiatives including remote check-in, long-term parking at Kuwait International Airport, and a business (C) class lounge that will be operational from (3Q) 2106.
(JZI) is in the advanced planning stage of establishing a dedicated terminal at the airport, which is operating well beyond its design capacity.
Talks are also continuing to find a long-haul partner, he said. These are at an early stage, but the intention is to offer nonstop routes in association with a global carrier.
July 2016: Jazeera Airways (JZI) has been granted land at Kuwait international Airport to build a dedicated terminal and car park.
At present, (JZI) shares space in the existing, over-crowded terminal facilities at Kuwait International, which is the country’s only airport.
(JZI) expects the new terminal project to cost about $50 million and be completed in the next 15 months.
February 2017: Kuwaiti hybrid carrier Jazeera Airways (JZI) reported that its net profit for 2016 dropped by almost -30%, to +KD10.8 million/+$35.4 million, compared to +KD15.4 million for 2015. The profit was achieved on revenues of KD52.8 million, down -10% on 2015’s figure of KD56.8 million.
The final quarter of the financial year saw (JZI) return a rare loss, recording a deficit of KD1.2 million compared to a profit of just over KD900,000 last time.
Jazeera (JZI) operates a fleet of 7 Airbus A320s on regional services, mainly around the Gulf.
(CFO) Donald Hubbard said a combination of low oil prices that resulted in lower fares, together with a slowing Kuwaiti economy and overcapacity in the market, had created downward pressure on yields. Although the price of oil was now on the rebound, that pressure had not yet relented. In 2016, average yield per seat fell by KD4.9.
Jazeera Airways Group Chairman Marwan Boodai said load factor was up +0.3% at 69.2% LF, which was “on average, around +10% higher than that of any competitor on our routes.”
Boodai said that, heading into 2017, he believed “everyone has learned their lesson [over low yields], nobody has gained and everyone has to be careful.”
To differentiate (JZI) from competitors, several measures were instituted in 2016 that are expected to show benefits in the coming year. These include a business lounge at Kuwait International Airport plus park-and-fly facilities. This differentiation will create an opportunity to improve yields, he said.
Looking further ahead, (JZI) is building a dedicated terminal at the overcrowded airport. This will aim to allow passengers to move from curb to gate in just 15 minutes, enhancing their overall journey experience: “We believe this will be a game-changer,” Boodai said. The new terminal is scheduled to come on-line at the end of 2017 or early 2018.
May 2017: News Item A-1: Jazeera Airways (JZI) announced a net loss of -KD900,000/-$2.96 million for (1Q) 2017 as it continued to be hit by a slowing economic backdrop and excess capacity in the area. (JZI) the Kuwaiti hybrid carrier achieved the result on revenue of KD10 million, down -15.3% on the same period in 2016.
Load factor was 72% LF, down -0.9% from (1Q) 2016.
“Our earnings for the quarter were impacted by a continuing slowing macro-economy and that is impacting our sector’s yields, (JZI) Chairman Marwan Boodai said. “The fact that our load factor remained virtually unchanged from the same time last year is a clear indication that demand for our product continues to be strong despite the macroeconomic pressures and the extra capacity that continued to be dumped on our sectors. Looking toward the rest of the year, we are working to counter these external pressures through internal measures. In the next quarter, we will launch our overhauled e-commerce platform that is tasked with generating ancillary income and optimizing the booking and payment experience to further differentiate our product,” he said.
All airlines in the region are facing “a new normal” of lower oil prices, although these had shown signs of starting to rise in the past 3 months, new (CEO) Rohit Ramachandran said. Added to that, an influx of new capacity in the region was now being deployed, with the result that “too many airline seats are chasing too few passengers, putting pressure on yields. Over the last few months, we’ve put together an ambitious plan to reduce our dependence on lower-yield traffic. We’re going after sectors that are less price-sensitive,” he said.
One such measure is a dedicated terminal building for (JZI) flights that (JZI) said will take passengers away from the overcrowded main building at Kuwait international Airport. This is scheduled to come on-line at the end of this year or (1Q) 2018 and (JZI) expects it to be a game-changing improvement.
Jazeera Airways (JZI), which has a fleet of 7 Airbus A320s and operates mainly in and around the Gulf, is holding talks with several long-haul airlines with an eye on increasing its range. Details are scheduled to be announced “in coming months,” Ramachandran said.
News Item A-2: The Gulf state of Kuwait has begun heavy construction work on its new airport, designed to ease serious overcrowding problems.
The existing Kuwait international Airport, the emirate’s sole civil aviation facility, has an annual design capacity of 6 million passengers, but last year handled 12 million. Over the past decade, passenger throughput has increased +10% annually.
The new airport will have an initial capacity of 25 million passengers and will be able to be scaled up to handle double that number as traffic increases. It will be built by a Turkish company, Limak Insaat. It is estimated that the number of passengers using the new airport will pass 23 million by 2027, just 4 years after the new facility opens.
Airlines using the existing airport are already taking measures to try to ease the burden until the new site opens. National carrier Kuwait Airways (KUW) expects a new “support terminal” for its passengers to come on line around the end of this year or in early 2018, with an annual capacity of >4 million.
Jazeera Airways (JZI) has already opened 4 dedicated gates for its services at the current airport and is also building its own terminal adjacent to the existing building.
The new terminal, which cost KD1.3 billion/$4.3 billion, will initially have 51 gates and stands. It will be able to serve up to 21 Airbus A380s simultaneously. The terminal has a trefoil shape when seen in plan form with 3 symmetrical wings of departure gates, with each façade 1.2 km/.75 mile long.
Among the new airport terminal’s facilities will be 66,000 roof-mounted solar panels that will generate up to 12 MW of electricity, around 10% of the facility’s requirements.
August 2017: INCDT: A Jazeera Airways (JZI) Airbus A320 sustained serious damage to an engine nacelle after it apparently struck a cable holding a military aerostat.
The A320 approaching Kuwait International Airport at the end of a flight from Riyadh, Saudi Arabia on August 27, was said to “have had a minor mid-air interception with a foreign object.”
(JZI) added the flight continued safely to its conclusion; nobody was injured and the passengers disembarked as normal. It said examination of the airframe had identified damage on engine #2 and repairs were being undertaken. An investigation into the incident is underway by Kuwaiti regulator, the Directorate General for Civil Aviation.
Inquiries to (JZI) were referred to an incident report in the Aviation Herald, which said the A320 (4162, 9K-CAK), was in a holding pattern at around 5,000 ft at waypoint (IVETA) when the right-hand engine hit the cable, slicing into the front of the engine nacelle but apparently not damaging the fan blades.
Film clips from Kuwait show what appear to be a large balloon rapidly falling to the ground, followed by shots of hundreds of meters of cable strewn across a desert road and people examining the wreckage of the tethered balloon.
Images elsewhere on the Aviation Herald website show deep incisions into 2 points of the front of the nacelle and ripped panels elsewhere on its structure.
October 2017: Kuwaiti hybrid carrier Jazeera Airways (JZI) has suspended plans to seek a long-haul partner, and will instead pursue more opportunities in the Indian subcontinent, according to Bloomberg, citing Jazeera Chairman Marwan Boodai as he unveiled a rebranding exercise for (JZI).
(JZI) operates a fleet of 7 Airbus A320s on regional services around the Middle East.
(JZI) has been searching for a joint-venture (JV) partner, and has held talks with several potential allies as recently as early summer. However, it has now decided to put those plans on the back burner as it instead turns to potentially more lucrative returns from the subcontinent.
According to the report, (JZI) will start services to Hyderabad in India and Lahore in Pakistan this month, and will add Delhi, Mumbai and Chennai services to the network before the end of this year.
Like most Gulf states, Kuwait has a large population of workers from the subcontinent who fulfill a wide range of blue collar and managerial roles. There is a constant flow of travelers going back and forth at the start or end of contracts, or for vacations.
Like most airlines in the region, (JZI) has recently suffered from falling yields; Boodai has complained several times of rivals dumping too much capacity into the Kuwait market. However, revenues improved substantially over the summer months, the peak time for travel in the region.
Boodai told Bloomberg that (JZI) would acquire 2 more A320s to cope with the expansion of its route network. All of its current fleet is leased.
(JZI) has embarked on a series of measures to attract customers, including paying for the construction of exclusive gates at Kuwait International Airport. It also plans to open its own terminal at the airport in early 2018.
November 2017: Jazeera Airways (JZI) has begun its 1st Indian city pair on November 16, connecting its Kuwait City (KWI) base with Hyderabad (HYD). The 3,370 km sector will be flown daily by (JZI) with its A320 fleet and will face direct competition from Air India (AIN)/(IND), which operates the route 2x-weekly.
The last route (JZI) started was to Taif in Saudi Arabia, a 3x-weekly service it no longer operates.
February 2018: Kuwaiti hybrid carrier Jazeera Airways (JZI) is edging closer to a low cost carrier (LCC) model, as it seeks to cope with continued tight margins in an over-supplied market. Announcing (JZI)’s 2017 financial results on February 8, (CEO) Rohit Ramachandran said 2018 would be “the year of the ancillary” as (JZI) sought to improve its figures. There would be a “new and aggressive focus” to increase revenue from this source, he said.
April 2018: Jazeera Airways (JZI) has attributed an improvement in the traditionally weak (1Q) financial figures to a combination of investments in improving passenger experience, a growing route network and higher asset utilization.
(JZI) sustained a net loss of -KD0.3 million/-$1 million, a +67% improvement on a loss of -KD0.95 million a year ago. Turnover was markedly up (by almost +43% to KD14.3 million).
Ancillary revenues grew +35%; in 2017 as Jazeera announced plans to reduce its traditionally large free luggage allowance for most passengers to 30 kg and introduced paid-for onboard food and drink.
1st-quarter passenger numbers were up +43% year-over-year (YOY) to nearly 404,000, while load factor increased to 75.8% LF from 71.9% LF in the year-ago quarter. Aircraft utilization jumped +25.7% (YOY) to 11.8 hours compared to (1Q) 2017.
“Despite the 1st quarter being a low travel season historically, we saw a +43.1% increase in flown passengers this year, a +42.7% growth in topline earnings, and significant improvement in our bottom line earnings,” (JZI) Chairman Marwan Boodai said.
“Looking ahead, the rest of the year is looking incredibly exciting for our business with our very own dedicated terminal coming on-line in mid-May, in addition to new routes, and new additions to the fleet,” he said.
Jazeera (JZI) operates a fleet of 7 Airbus A320s, primarily on routes in the Arabian peninsula and Egypt, as far north as Tbilisi, Georgia, and to several destinations on the Indian subcontinent. It plans to add 2 A320s later this year.
Click below for photos:
JZI-A320 - 2016-04.jpg
4 ORDERS A320-200:
12 A320-214 (CFM56-5B4/P) (2569, /05 9K-CAA; 2584, /05 9K-CAB; 2792, /06 9K-CAC; 2820, /06 9K-CAD; 3016, /07 9K-CAE; 3349, /07 9K-CAF; /07 9K-CAG; /07 9K-CAH; 3919, 9K-CAI, 2009-06; 3939, 9K-CAJ, 2009-06), 2 (GEF) LEASED. 3349; 3670; LEASED TO (VUS) 2010-07. 2569 LEASED TO (NASAIR (NAZ) 2013-06. 165Y.
1 A320-214 (CFM56-5B4/P) (4162, 9K-CAK), AL SAHAAB AIRCRAFT LEASING LEASED 2010-01, EX-(F-WWBS). 165Y.
0 A320-214 (CFM56-5B4/P) (2162, 2004-11; 2183, /04 9K- 2004-08), EX-(PRH), (BOU) LEASED. 2162; 2183; NOT TAKEN UP, LEASED TO (PAL) 2005-03. 165Y.
12/6 ORDERS A350 XWB-800 (TRENT XWB), (AVF) LEASED:
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MARWAN BOODAI, CHAIRMAN.
JASSIM BOODAI, VICE CHAIRMAN.
ROHIT RAMACHANDRAN, CHIEF EXECUTIVE OFFICER (CEO).
ABDULLAH AL HUDAID, CHIEF OPERATING OFFICER (COO).
DONALD HUBBARD, CHIEF FINANCIAL OFFICER (CFO).
CAPTAIN MUKHLED AL SAWAGH, VP FLIGHT OPERATIONS.
BADER AL MERSHID, VP INDUSTRY AFFAIRS.
MARK ELLIOTT, VP FINANCE.
ALI FAIROOZ, VP GROUND OPERATIONS.
SUHAIL HOMSI, SENIOR DIRECTOR SUPPORT & DEVELOPMENT.
FAWAZ AL-SIRRI, MANAGER COMMUNICATIONS (email@example.com).
FALAH SHUMMARI, FLIGHT OPERATIONS MANAGER.
SUZANNE MILLER, SALES MANAGER UAE (2009-04).