AMMAN, Dec 22 - Jordan risks the collapse of a state-owned airline, Royal Jordanian, unless its financial aid is not available, says the president of the company.
"Every single airline was assisted by their governments - except for us," said Samer Majali, CEO of Reuters.
"The government reluctantly offered the aid because of the huge burden on the budget," said Majali, who returned to his job in April after a 12-year hiatus to train the carrier through the pandemic in order to survive in the regional crisis. He had been in the state for more than fifty years.
The only aid the Royal Jordanian received was a cash injection of a 50 million dinar ($71 million) last year, and approved long before the pandemic.
"Half-baked and temporary, patchwork solutions will not work, either there is a serious investment in RJ or the airline has no chance of survival," said he.
The airline - which contributes more than $1 billion to the economy - will resume a slash the ten-five-year slash this year and slash the break-even in 2023. Nevertheless, investors needed.
"Now it's a cost of an investment in a carrier... But a decision should be taken soon," Majali said.
He said about 70% of the company's 250 million dinars (350 million dollars) accumulated debt came from the ground up of a fleet last year.
After the war, the Arab airline became the first to get privatised in 2007, but when the government returned with a majority stake, the money raised was raised by a series of capital raisings.
Majali said the government recovered most of the money it gave the company in 20 years through private acquisition proceeds.
It owes around 70 million dinars annually to the state in taxes, taxes and concessions, Majali said.
The airline has set up a five-year recovery plan to expand its travels from a current 35 to 60 and modernise its fleet. The airline recently issued an appeal for proposals in October of 30 short-bodied and regional jets to replace its current 17 aircraft in that category, said Majali.
Ultimately, it was the objective of a strategy to transform the airline into a hub for Levant as well as expand its regional network amid forecasts of high air passenger demand in the region in the coming years.
Majali added that it evaluating offers from leasing companies and engine manufacturers.
(1 milliard dollars = 0,7080 dinars) Jordanian dollars
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