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|06 November, 2018

Royal Jordanian CEO says manufacturers in "head-to-head race" for new jet order

Amman-based carrier is in talks with Airbus, Boeing, and Embraer for an order of 23 jets

Image used for illustrative purpose. A Royal Jordanian Airbus 320 is being prepared at Amman airport minutes before its departure to Baghdad September 27, 2000.

Image used for illustrative purpose. A Royal Jordanian Airbus 320 is being prepared at Amman airport minutes before its departure to Baghdad September 27, 2000.

REUTERS/Reuters Photographer

CAIRO - Royal Jordanian expects to decide in the first quarter next year on an order for over 20 narrow-body aircraft, the Middle East airline's chief executive said on Tuesday.

The Amman-based carrier is in talks with Airbus, Boeing, and Embraer for an order of 23 jets to replace and expand its fleet of 19 Airbus A320 family aircraft and Embraer 195 and 175s.

"I think right now it’s a head to head race ... and the best offer will win," Chief Executive Stefan Pichler told Reuters in an interview in Cairo.

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"We'll probably make a call in the first quarter of 2019."

If the order goes ahead it will come around two years after Royal Jordanian launched a turnaround programme that helped the airline return to profitability in 2017.

Pichler said the restructuring plan was on track and after making 10.2 million dinars ($14.4 million) in the first nine months, the airline was set to remain profitable this year.

"If we had the same fuel prices as last year we would now be operating with a huge profit margin, but that’s life," he said.

To counter a sharp rise in oil prices this year Royal Jordanian started hedging 22 percent of its fuel requirements in the fourth quarter, Pichler said.

Fuel is often an airline's single largest operating cost.

A currency hedging strategy is also in development, Pichler said.

Wary of overcapacity in the Gulf market, a region dominated by major airlines Emirates and Qatar Airways, Royal Jordanian has said it will focus on the Middle East's Levant region.

Pichler said he was hopeful flights to Syria would resume within the next three to four months, although Royal Jordanian had yet to make any plans to do so.

"You can’t put in your plan you’ll fly back to Damascus when there’s still war," he said.

The land border crossing between Jordan and Syria reopened last month.

($1 = 0.7090 Jordanian dinars)

(Reporting by Lena Masri Writing by Alexander Cornwell Editing by Mark Heinrich)