Jordan Times
Sunday, September 9, 2001
High level panel formed to study RJ situation, move to implement future vision
By Issam Qadamani
Al Rai
The committee members include officials from the ministries of finance and transport as well as Royal Jordanian, the national flag carrier.
Addressing a press conference yesterday, Majali said he expected the committee, formed following a meeting on Thursday with His Majesty King Abdullah, senior Cabinet ministers, and RJ board members and management, to complete a study on the situation of the airline within the coming three weeks.
The RJ chief cited figures from recent years showing that after privatisation and prior to the outbreak of violence between Israeli authorities and Palestinians in the West Bank and Gaza Strip, the airline was “making money.”
Majali, who is also chief executive officer, said that in 1998 RJ transported 1.2 million passengers, realising operational revenues estimated at $28 million, but it sustained a net loss estimated at $46 million that same year as a result of accrued debts and debts servicing borne soley by RJ, prior to the restructuring programme.
In 1999, RJ realised a net operating profit of $18 million, he said, and a net profit of $28 million, because the privatisation programme started, the government dealt with most of the debt and the airline sold some if its assets. That year, passengers increased by 5.5 per cent to 1.5 million, he added.
By the end of 2000, when the Intifada was three-months-old, RJ recorded a small operational loss of $4 million and a net profit of $1 million, attributable to the sale of the Tristar aircraft.
But since September 2000, Majali said, “the number of passengers aboard Royal Jordanian dropped by 20 per cent.”
He said that over the last 10 months more than 70,000 reservations were cancelled, thus denying Royal Jordanian around $12 million in revenues, and 40 charter flights were cancelled.
Tourism to Jordan from other than Arab countries was hard hit since the outbreak of the Palestinian Intifada against Israeli occupation and aggression nearly a year ago.
Majali added that this negative development was “more severely faced by other regional airlines whose losses each could be counted in the hundreds of thousands.”
Majali stressed that “numbers reflected in 1998 and 1999 illustrate that under normal circumstances and after the restructuring programme, Royal Jordanian as a business enterprise makes money. It is only because of the situation in the region that we are taking a hit.”
He said plans to surmount the problem at RJ include cutting on the airline's expenses.
He said last week's high-level talks with King Abdullah and concerned officials was the first time since registering as a private company that there has been dialogue with the leadership and the government on a future vision for the airline.
At that meeting, Majali made a presentation of the state of the company highlighting its human resources, fleet, privatisation process, and offered a future vision.
The meeting discussed RJ's route network and fleet, and the management presented related options.
He said the leaning was to opt for maintaining the airline's long-range operations which include destinations to the US and Far East as well as to Europe, the Middle East and Africa, rather than to cut the US and Far East routes.
Majali added that if that option was to be taken, RJ would require aircraft that can make those long-haul flights non-stop, in order to remain competitive in the market.
“We also discussed upgrading RJ's services to public, the interiors of our aircraft, the menu, and uniforms, and concentrating on frontline staff, those in direct contact with our passengers and clients, in terms of training and better incentives,” he said.
For the new airline chief, who was head of passenger services until his appointment as president and CEO, the vision revolves around improving the image of RJ in the Jordanian market.
“We are trying to change the perception of how Jordanians feel towards RJ. Unfortunately, there has been a negative perception — a large losing company, overstaffed and overpaid.”
He said he and his team are working to increase RJ's profile in the Jordanian society, through advertisements, seminars, and television, by concentrating on the benefits in price and product.
“We want Jordanians to travel on RJ again,” Majali said upbeat.
To that end as well, he said RJ will sign an agreement with an independent local company affiliated with international management consultancy firms, for an objective evaluation of its workforce and recommendations for a new administrative structure that will consider, job levels, titles, updated job descriptions, salary scales, etc.