Sunday, Mar 15, 2009
By Maria Abi-Habib
Of ZAWYA DOW JONES
DUBAI (Zawya Dow Jones)--Kuwait's Jazeera Airways (JAZEERA.KW) plans to boost its passenger numbers and fleet of aircraft this year as the carrier is betting that more people will travel on the low-budget airline amid difficult economic times, the airline's chief executive said Sunday.
"The economic crisis is helping our business," Marwan Boodai, Jazeera's chief executive, told Zawya Dow Jones in a phone interview. "Passengers will look for more value for their money in 2009 with the economic situation."
The Kuwait Stock Exchange-listed airline aims to service 2.5 million passengers in 2009, compared with a total of 3.7 million passengers since its launch in October 2005, Boodai said.
The carrier, which has two hubs -- one in Dubai and one in Kuwait -- will also open a third, "shared hub by the fourth quarter," Boodai said without providing more details.
To meet growing demand, Jazeera has expedited two aircraft for delivery in June, which will bring the carrier's total fleet to 10, Boodai said. He added that Jazeera is also in talks to expedite delivery of one more plane and may ask for early delivery of more jets.
Jazeera may also expand destinations by the end of the year but is now waiting to see if more countries open their skies to competition and how governments will deal with the economic slump before taking further action, Boodai said.
The airline said earlier Sunday that its fourth-quarter net profit more than doubled to 2.967 million Kuwaiti dinars ($10.057 million) on the back of the sale of six aircraft to its Sahaab Leasing unit. Jazeera subsequently leased back the aircraft.
Jazeera plans to become debt free "in a short period of time," Boodai said. "We won't need direct financing, our leasing company will take care of that."
Sahaab targets a fleet size of 50 aircraft, including all 32 planes on order by Jazeera and due for delivery by 2014, Boodai said.
Sahaab Leasing will eventually also service other airlines in the region, he said. The leasing company may target aircraft that are on order by other airlines, which are having trouble completing payments.
Jazeera expects good profits in 2009 due to lower fuel cost and will try to provide "more economical ticket prices" for customers looking to save cash during the economic slump, Boodai said.
The low-cost carrier's profit margins were squeezed last year when oil prices soared to a record high of above $147 a barrel in July in New York. Crude has dropped by about $100 a barrel since, with Nymex crude oil futures for April delivery settling at $46.25 a barrel Friday.
Jazeera, which is competing with Sharjah-based Air Arabia, flies to 25 destination across the Middle East, Europe, Iran, North Africa and India.
Jazeera's shares closed unchanged at KWD0.320 Sunday. The shares are down about 15% since the beginning of the year.
-By Maria Abi-Habib, Dow Jones Newswires; +97150 941 9737; maria.habib@dowjones.com
Copyright (c) 2009 Dow Jones & Co.
(END) Dow Jones Newswires
15-03-09 1342GMT
