Kuwaiti carrier Jazeera Airways’ full-year net profit fell by nearly 70% to KD6.2 million ($20.1 million), as it experienced a substantial decline in yield.
Jazeera Airways’ revenues to the end of 2023 reached KD198 million – a rise of 8.8%.
But the budget airline says a “sudden and large influx of capacity” from Gulf airlines has exerted pressure on ticket prices “across the board” and resulted in a “large drop” in yield – some 20% in the fourth quarter and 17% over the year.
Jazeera made a net loss of KD7.1 million in the fourth quarter, much deeper than the KD683,000 in the same period of 2022.
But the airline is maintaining a “positive outlook” for the current year, as it implements cost-cutting initiatives including renegotiation of several service contracts.
Jazeera took delivery of four A320s over the second half of last year, giving it a fleet of 23 aircraft.
The carrier had to wet-lease two aircraft last summer to compensate for delivery delays, but it will expand its fleet to 24 by the end of the first quarter and has “no plan” to pursue wet-leasing for summer 2024.
Chair Marwan Boodai says the airline’s performance last year was influenced by overcapacity and a “challenging regulatory, geopolitical and regional landscape”.
But he points out that the carrier remained profitable, while higher loads – reaching 78.2% – and a greater market share put it in a “strong position”.
Jazeera aims to increase its fleet to 35 over the next five years, and broaden its network to over 100 destinations compared with the 64 it served last year. It is also looking to raise its average load factor above 80% within three years.
