Kuwait-based Jazeera Airways is eyeing placing a large aircraft order within weeks, with the tentative announcement date lining up nicely with the Dubai Air Show in mid-November. Airbus and Boeing are ostensibly in the race, but Jazeera’s CEO already admits an Airbus order is likely.
Jazeera Airways is expected to announce a large aircraft order at the Dubai Air Show. Photo: Getty Images
ll Airbus airline likely to stay that way
Coinciding with the release of Jazeera’s board of directors results on Monday, the airline’s top executives did the media rounds and flagged an imminent order announcement. The airline is eyeing an order for either 30 Airbus A320neos or 30 Boeing 737 MAXs.
But CEO Rohit Ramachandran told Arabian Business the order was likely to go to Airbus and was a matter of weeks away from announcement. Jazeera Airways currently operates 16 aircraft – eight Airbus A320-200s and eight A320neos.
Reuters reports Jazeera Chairman Marwan Boodai saying an order was likely before the end of March 2022. But the same report flagged the Dubai Air Show as a likely site for the announcement, given it will be this year’s biggest aircraft trade show.
Marwan Boodai indicated the aircraft deal would be partly financed by debt and partly financed by existing cash reserves. The list price for an A320neo is US110.6 million. Boeing asks US$121.6 for a 737 MAX 8. However, it’s likely a substantial discount is in the offing. Reuters values the order at around US$2 billion.
Chairman of Jazeera Airways Marwan Boodai. Photo: Getty Images
Jazeera Airways returns to profitability
Speculation concerning the aircraft order comes as Jazeera Airways reported a return to profitability in Q3 2021. The airline posted a profit of US$31.2 million in the quarter. Revenue was up 421.7% to US$105 million compared to Q3 2020.
“Jazeera is returning to profitability earlier than our previous forecast for Q4, a positive sign for our airline which successfully mitigated the impact of the pandemic by implementing decisive measures to safeguard its financial position and liquidity, as well as to protect shareholders and customers’ rights,” said Mr Boodai.
Passenger numbers increased 361.8% to 302,900 in Q3 2021 compared to the same quarter in 2020. Average passenger loads rose 26.7% to 65.6% over the 12 months.
“Despite continued limitations in the number of returning passengers at Kuwait International Airport until the end of the quarter, our load factor continued to increase as well as yield driven by limited supply,” added the Jazeera Airways Chairman.
Jazeera Airways operates 16 narrowbody Airbus aircraft. Photo: Getty Images
Jazeera Airways strikes an opportunistic pose
In August, Rohit Ramachandran told an analysts briefing the airline was slowly returning to normality after the travel downturn. But he also said Jazeera had thrown out its pre-travel downturn rulebook.
“You will find that we are doing quite a lot of things opportunistically during this period, which is a departure from the low-cost airline bible,” he said.
Suggesting the airline would drive a hard bargain in negotiations with either aircraft manufacturer, the CEO added;
“I think despite our modest size, Jazeera, when it comes to A320neo leases globally, is among the best three airlines in the world in terms of negotiating aircraft costs.”
Meanwhile, November’s Dubai Air Show is shaping up as a blockbuster aviation event. A raft of announcements and launches from airlines and manufacturers are anticipated. At the last Dubai Air Show in 2019, aircraft sales topped US$54.5 billion.
If Jazeera Airways wants to make a splash announcing an order for new planes, they have the perfect platform at their disposal.