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Royal Jordanian .. How will it recover from the Corona strike and the accumulation of losses? Comprehensive news agency and newspaper

Amman Today

publish date 2021-05-26 15:58:13

Jordan News

Sawsan Abu Ghneim

Al-Hamouri: The failure of ownership is not the result of the pandemic

Gamble: Leasing a large number of aircraft has accumulated losses

Rajoub: The property has been affected by the global epidemiological circumstance

Majali: Pledges to look into the property’s tax situation

The global outbreak of the Corona virus affected the economy around the world and disrupted many of its activities, but the general closure measures that followed the outbreak of the disease were a real reason for the failure of some companies, while the Royal Jordanian Airlines Company had a large share of the damage due to the pandemic.

After the company began to record positive financial results, which is an indication of the start of the process of transition to profitability, to advance the company and enable it to assume the position that suits it as a national carrier for Jordan and an ancient and distinguished airline in the Middle East region, the Corona virus came to restore it to what it was, and even worse.

The property recorded losses of 161 million dinars after a sharp decline in its revenues in 2020 as a result of the repercussions of the pandemic, compared to 10.4 million dinars in profits for the year 2019, as financial data for the property showed an increase in the company’s losses in the first quarter of this year, to record 36.4 million dinars compared to With losses of 25.47 million dinars in the first quarter of 2020.

The company’s revenues decreased by 66% in the first quarter of 2021 to record 38.9 million dinars, compared to 114.1 million dinars in the first quarter of 2020.

The accumulated losses in the company’s balance sheet were about 282.8 million dinars. The company records a deficit in property rights of 45.8 million dinars, as it is on March 31, 2021.

The decline in passenger numbers began in January 2020 due to the stagnation of travel traffic at the beginning of the crisis, and reached its peak mainly with the issuance of a decision by the competent authorities to completely stop Royal Jordanian flights.

And all flights were suspended in mid-March until the beginning of September 2020, and operations during these months were limited to evacuation and cargo flights, and many restrictions were imposed on travel movement with the closure of many airports, including restrictions on the number of daily flights at an airport. Queen Alia International after the return of commercial air traffic to and from Jordan, which led to a decrease in the number of passengers from 3.3 million passengers in 2019 to 751 thousand passengers in 2020, recording a sharp decrease of 77%.

Al-Hamouri: Mismanagement, corruption, and conciliatory appointments

Economic analyst Dr. Qassem Al-Hammouri confirmed to the online newspaper “Jordan News”, that the failure of the monarchy has nothing to do with the Corona virus, and is not the result of the pandemic, with evidence that the budget presented to the company over many years shows that it is making losses, and has contributed to a significant increase in government debt.

Al-Hamouri attributed this to what he called “mismanagement and corruption, in addition to unjustified appointments, which lead to high costs and less revenues, because the appointments are far from the efficiency standard and increase costs, and in return, productivity decreases and profits decrease.”

He added, “There are structural imbalances. When the observer looks at the property company, he feels that the government is dealing with it as a decoration and a flag for Jordan, and not on the basis that it is a profitable company that needs strong management, and appointments have become in the property to appease, so a former minister or a person affiliated with the state is appointed. Such people will certainly not work to raise the company’s efficiency until it becomes profitable and successful.

Al-Hammouri pointed out that “the government must review the ownership company and re-examine the files in which very big financial decisions were made, especially the decisions to sell and lease aircraft because it incurred great losses to the company. In short, if there is a strong accounting of the company’s employees, the property will not be able to succeed, but will continue to fall to the bottom until it disappears.

Gamble: Raise the company’s capital so that losses are dealt with

For his part, the economist, Dr. Wagdy Makhamra, believes that “there are accumulated problems that the ownership suffers in light of the high costs, in addition to the leasing of a large number of aircraft, and the presence of excess labor, and all these factors increased property losses significantly before the Corona pandemic.”

Makhamreh added that the Corona pandemic accumulated losses because there were no longer revenues in these exceptional circumstances, until the losses reached more than 100 million.

He revealed the government’s tendency regarding the possibility of pumping part or raising the capital for the company in order to address the losses incurred by the property in recent years, because economic expectations show that travelers will not be attracted before 2022.

Makhamreh confirmed that the accumulation of losses over 3 years will exacerbate the problem out of control, unless the government eases measures to attract part of the travelers and excludes some measures with Corona, and that there will be flexibility in procedures, so that people do not resort to using another airline. .

Makhamrah added, “The government will have to intervene and support the property with sums, and these sums will be from the taxpayers within the government budget, or there will be a tendency to attract a strategic partner, who enters with a share of the ownership, raises its capital and tries to solve the problems.”

Rajoub: Royal Jordanian Airlines was not isolated from the global scene

For his part, investment and risk management expert, Dr. Samer Rajoub, said, “Historically, the commercial aviation sector has provided more than 80 million jobs worldwide, and contributed up to 8% of global GDP, and more than 30% of the total value is transferred. International trade and about 60% of international tourists are by air.

Speaking to “Jordan News”, he added, “At the beginning of 2020, two-thirds of the world’s aircraft fleet were suspended, and nearly 98% of global navigation operations were disrupted, according to the latest report from the International Air Transport Association (IATA), and the aviation industry had never before seen such This sharp and sudden decline in demand levels (a decrease of 75.6%), as the impact of the Covid-19 pandemic continued for a long time and was not geographically limited, which distinguished it from many other previous crises.

Rajoub pointed out that “Royal Jordanian Airlines was not isolated from the global scene, as its fleet stopped operating completely coinciding with the repercussions of the outbreak of this epidemic, and the number of passengers between 2020 and 2019 decreased by (77%) from 3.3 million passengers during 2019 to 751 thousand passengers during the year 2020, and this decline was undoubtedly reflected on the profitability levels of the company, as the company lost 161.1 million Jordanian dinars after recording a profit of 10.4 million Jordanian dinars in 2019. ”

According to Rajoub, “this loss could not be avoided as a result of the global closures on all civil aviation routes in the world and in Jordan in global and local attempts to contain the spread of the Coronavirus.”

Rajoub noted that “Royal Jordanian did not fail, but was affected by the global epidemiological circumstance that stopped about 66% of commercial aviation, and it was possible for the royal lines to possess some kind of maneuverability and flexibility, by owning a fleet of air transportation of goods and trade exchange, as this field continued. During the Corona pandemic and did not stop.

Majali: Most of the global airlines have the support of their governments

The Vice-Chairman of the Board of Directors at Al-Mulkia and the CEO, Engineer Samer Al-Majali, said that Royal Jordanian was not the only airline that suffered as a result of the pandemic. Rather, all international airlines suffered from this decline and financial losses in light of the difficult global epidemic situation, noting that most These companies have had support from their governments to cushion their losses due to the pandemic.

He added that Royal Jordanian suffers from “a fundamental weakness in the capital, and a loss in 2020 will lead to a significant weakness in the capital and the ability of the company to continue.”

Al-Majali pointed out that Royal Jordanian continues to coordinate with all concerned parties, foremost of which is the government, to find effective solutions to the challenges that the company is facing at the present time, in light of the continuing repercussions of this pandemic since its inception of closures and quarantines locally, and in the purposes and destinations of Royal Jordanian regionally and globally.

According to Majali, “The government has pledged to consider the property’s tax situation as part of the aid approved for the sectors affected by the impact of the Corona pandemic.”

He stressed that Royal Jordanian offered a program of intensive flights in the coming summer season, starting from the first week of next July, to all its traditional destinations in the region and North America, and the gradual resumption of operation to the European continent, coinciding with the removal of restrictions in those countries to receive visitors.

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Jordan News

Source : اخبار الاردن

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