Middle Eastern carrier Royal Jordanian has reached an agreement with one of its major lessors, and is negotiating with three others, in a bid to reduce the airline’s fleet costs.
It says it hopes to finalise talks with the remaining lessors “shortly” and save around $40 million over the next three years.
Royal Jordanian outlined a 2021 fleet plan earlier this year under which it would operate 21 of its aircraft – among them five Boeing 787s, 11 Airbus A320-family jets, and four regional Embraer E-Jets.
It also included a single Airbus A310 freighter dedicated to cargo services.
Royal Jordanian says it is restructuring its operations, in order to reduce losses for upcoming financial periods and generate sufficient liquidity to fund its activities and meet its commitments.
Chief executive Samer Majali, who recently returned to head the carrier again more than a decade after he stepped down to lead Gulf Air, says the carrier is reviewing the size and capacity of its fleet.
Majali says the intention is to offset some of the costs associated with reduced utilisation stemming from the air transport crisis.
Royal Jordanian states that aircraft leases make up 47% of the carrier’s fixed costs each month, and that restructuring will “reduce the financial impact of aircraft ownership”.
For the full year 2020 the airline turned in a net loss of over JD161 million ($227 million), in contrast to the previous net profit of JD10.4 million, as revenues fell by 68% to JD212 million.
Royal Jordanian says the closure of borders and airports led to a “complete cessation” of operations at times, and a sharp decline in revenues for long periods of the year.
It adds that its plans to modernise the short- and medium-haul fleet have been postponed as a result of the crisis.