Kuwait's Jazeera Airways swings to annual profit despite 'turbulent' operating conditions

Net profit for 2021 reached $23.1m, from a loss of $87.3m in 2020, amid higher passenger traffic and rising revenue

The headquarters of Jazeera Airways in Kuwait City, bearing the new logo on the facade. The carrier reported a strong rise in earnings after it rebranded this week. Yasser Al Zayyat /AFP

Kuwait's Jazeera Airways swung to an annual profit in 2021 as it carried more passengers and revenue increased, despite "turbulent" operating conditions in 2020.

Net income for the year reached seven million Kuwaiti dinars ($23.1m), from a loss of 26.4m dinars in 2020, the airline said in on Sunday. Operating revenue nearly doubled year-on-year to 80.3m dinars as it flew more passengers and filled more seats.

“The challenges that the pandemic brought about in the travel industry in 2020 also opened new opportunities for our airline: cargo operations, charter flights and connecting routes were expanded to benefit our business," said Rohit Ramachandran, Jazeera Airways' chief executive.

"We were resourceful in adapting our business operations which enabled us to get through a very difficult period and come back strongly in 2021.”

The airline returned to the black in 2021 following a second year of pandemic-related travel restrictions and capacity limitations at Kuwait International Airport, and globally, in response to the continued spread of the Covid-19 virus, weighed heavily on its bottom line.

Operations at Kuwait International Airport, the airline's home base, remained at limited capacity during the first nine months of the year, with restrictions imposed and direct flights suspended from 35 countries.

The swift introduction of vaccinations in Kuwait contributed to the ease of restriction in the second half of the year, with PCR tests mandated on departure and arrival to limit the quarantine in Kuwait.

The low-cost airline carried 1 million passengers last year, 48.2 per cent more than in 2020, it said.

Load factor, a measure of how well an airline is filling available seats, reached 66.8 per cent, an increase of 3.9 per cent on the previous year, it said.

"Financially, our airline took the right steps to control costs and limit cash burn, while operationally we focused on new destinations that satisfied an appetite to travel to destinations marked “Covid-safe” as well as catering to a high and latent demand for connecting flights between the Middle East, Asia and Europe," said Marwan Boodai, the airline's chairman.

The company's board recommended a cash dividend of 32 fils per share for 2021, according to a statement.

Last month, Jazeera Airways' board approved a $3.4 billion deal to buy 28 narrow-body aircraft from Airbus to expand its fleet across markets in the Middle East parts of Europe.

The airline had signed the initial agreement for 20 A320neos and eight A321neos during the Dubai Airshow in November 2021. The Jazeera Airways board also approved an agreement to buy two CFM LEAP1-A26 spare engines in a deal valued at $32.2m.

The airline was also upgraded in January to Boursa Kuwait's Premier Market after it exceeded the minimum liquidity and market capitalisation requirements over the past two years.