Kuwait’s Jazeera Airways’ operating loss widened significantly in the second quarter to KD4.73 million ($15.7 million) as compared to KD1.87 million in the same period in 2020.
The group says the outbreak of the Covid-19 pandemic in early 2020 in most countries has caused widespread disruptions to business, with a consequential negative impact on economic activities. The economic fallout of the crisis is significant and evolving, impacting the key performance indicators of the group.
Total loss incurred during the period was KD6.52 million versus KD3.93 million in the second quarter of 2020. The airline generated KD7.42 million in revenues, down 4.1% year-on-year. As compared to the second quarter of 2020, passenger revenue declined to KD5.88 million from KD6.94 million whereas ancillary revenue increased to KD750,015 from KD136,885. Cargo revenues declined 17% year-on-year to KD480,497.
In July, Jazeera completed a rights issue amounting to KD10 million. As of 30 June, its cash and cash equivalents stood at KD8.29 million.
For the January to June period, Jazeera has posted an operating loss of KD8.84 million, an increase from KD3 million in the first half of 2020. Total loss for the period stood at KD11.6 million as compared to KD9.95 million in the same period year ago. The carrier saw a 42% year-on-year decline in its revenue to KD15.5 million.
The group says it is closely monitoring the situation and has activated its business continuity plan and other risk management practices to manage the business disruption in order to boost the liquidity and sustain the business. The group will make a gradual return to service and serve its passengers based on the easing of lockdowns and travel restrictions worldwide.
Jazeera says its financial results in the future periods will continue to depend on the pace of recovery in demand for air travel in the world. Given the unpredictability of the duration and magnitude of the pandemic, the actual impact on the future profitability, financial position and cash flows may differ from the current estimates and assumptions made, the group says.