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


CAIRO (Reuters) – Royal Jordanian <RJAL.AM> 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 <AIR.PA>, Boeing <BA.N>, and Embraer <EMBR3.SA> for an order of 23 jets to replace and expand its fleet of 19 Airbus A320 family aircraft and Embraer 195 and 175s.

FILE PHOTO: A traveler walks past a sign for Royal Jordanian airline at JFK International Airport in New York, March 21, 2017. REUTERS/Lucas Jackson
FILE PHOTO: A Royal Jordanian Airlines Embraer ERJ-195AR jet waits to take off at Cairo Airport, Egypt, July 13, 2016. REUTERS/Amr Abdallah Dalsh

“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.

“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.

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