2022:
Record-Breaking Performance
CONTENTS
THE YEAR IN REVIEW
Chairman's Message | 2 |
Chief Executive Officer's Message | 3 |
Financial and Operational Highlights | 4 |
Operational Expansion | 5 |
Positive Outlook | 7 |
CORPORATE GOVERNANCE
Governance Report | 8 |
ِAudit Committee Report | 16 |
Board Acknowledgement | 17 |
Independent Directors' Acknowledgements | 18 |
FINANCIAL STATEMENTS
Independent Auditors' Report | 20 |
Statement of Financial Position | 21 |
Statement of Income | 22 |
Statement of Comprehensive Income | 22 |
Statement of Changes in Shareholders' Equity | 23 |
Statement of Cash Flows | 23 |
Notes to the Consolidated Financial Statements | 24 |
1
CHAIRMAN'S MESSAGE
Dear Shareholders,
I am proud to present our annual report for
2022, which highlights Jazeera's financial and
operational performance for the year. In the last fiscal year, Jazeera Airways reported record annual net profits of KD20.1 million, an increase of 183.6% over 2021 and the highest in the history of our airline.
UPWARD TRENDS
Our operating revenues for 2022 increased by 126.5% to KD182.116 million, and operating
profit rose by 148.4% to KD26.8 million. This was despite high fuel prices which added approximately KD9 million to our costs. Even as
we incurred this additional cost burden, we
achieved record profitability and delivered on
our commitment to all our key stakeholders. A
stringent cost management strategy, strong business plan and our hardworking teams drove this across the network.
In the last year, we carried 3.6 million
passengers, an increase of 247.5% compared to the previous year. Load factor increased by
10.2% to 77.01, which offset a decline in yield,
the average fare paid per passenger, by 35.1% to
KD47.9. Overall passenger traffic at Kuwait International Airport dropped by 26% in 2022 vs 2019 pre-pandemic, whilst Jazeera traffic
increased by 19%. Our market share has also
increased significantly over the years. In 2017, our market share from Kuwait was 9.69% that grew to 30.9% in 2022.
DIVIDEND RECOMMENDATION
We are pleased to announce that our Board of Directors has recommended distributing a cash
dividend of 50 fils per share for the second half of 2022. This will be subject to Shareholders' approval at the annual general meeting (AGM). In addition to the interim cash dividiends of 30
fils per share distributed for the first half of
2022, the total cash dividends distribution for the full year 2022 will reach 80 fils per share.
FUTURE GROWTH
We continue to stay focused on growing our network and fleet while enhancing services to deliver our best to customers. In the coming year we will be adding more aircraft to our fleet to serve a growing network covering the Middle East, Central & South Asia, Europe and Africa.
I would like to take this opportunity to thank you
- our shareholders - for your support, as well as
all our staff for their ongoing efforts in keeping
Jazeera Airways flying high.
Yours Sincerely,
Marwan M. Boodai
Chairman
2
CHIEF EXECUTIVE OFFICER'S MESSAGE
Dear Shareholders,
2022 has been a remarkable year for Jazeera Airways, ending on a high note with unprecedented record numbers. Our financial
performance is the result of a robust business model as we continue our steady growth with prudent cost control, and high operational efficiency. With virtually zero debt and cash reserves in excess of 50 million dinars, we continue to remain in a strong financial position.
OPERATIONAL EXPANSION
Our 2022 operational metrics were strong, having carried 3.6 million passengers, an average annual load factor in the excess of 77%,
12.9 hours of utilization per aircraft per day and an average yield of KD47.9.
We successfully added 15 new cities to our network to serve 58 destinations across the Middle East, Central & South Asia, Africa and Europe. The vast majority of which were previously unconnected to Kuwait. The expansion was spurred by a demand for better connectivity from Kuwait, as well as through Kuwait to the rest of the region and beyond.
In the last year, we received two new Airbus A320neos, from the order we placed in 2021.
This increased our all Airbus fleet to 19 aircraft and greatly supported some of our new routes.
ENHANCING CUSTOMER EXPERIENCE
Focusing on customer experience, we
introduced a dedicated Customer Service Centre that offers round the clock support to
Jazeera passengers. An early check in and WhatsApp services also featured in the list of
service enhancements for the year.
To accommodate the growing number of passengers, we undertook several expansion projects and upgrades at the Jazeera Terminal 5 (T5). With additional boarding gates &
aero-bridges, a larger transit hall fully facilitated to serve connecting passengers, an enhanced
Duty Free shop, as well as more retail and food and beverage outlets, we ensured an enhanced
passenger experience.
A single security check, with no additional
screening at the boarding gates also simplified the passenger journey. In addition, we introduced a dedicated customer service team at T5 available around the clock to assist passengers.
IN-HOUSE TRAINING
The "Approved Training Organization" certification from Kuwait's Directorate General of Civil Aviation was a breakthrough achievement. The certification enables Jazeera
to conduct in-house training for pilots and cabin crew at our headquarters in Kuwait. We have also invested in an Airbus simulator, training equipment and a mock up aircraft to facilitate
this training at a new state of the art building.
The flight simulator is expected to arrive in
August this year.
The training centre will help secure a future pipeline of pilots and crew that have the Jazeera Airways DNA, leading to lesser dependence external resources. All of this is also expected to
save costs and add to our revenues in the long run.
Previously, in sourcing our maintenance also had a positive impact on our costs and we are exploring this option in different departments
including within the organization.
GREAT PLACE TO WORK
I am also pleased to share that based on employee validation, Jazeera Airways was officially certified as a "Great Place To Work". This title is a positive reinforcement to how we
manage our human capital alongside customers, partners and other stakeholders.
FUTURE DEVELOPMENTS
For 2023, we expect to see another exceptional year for Jazeera in terms of passenger movements, revenue, and we certainly expect strong profitability, as well. We also entered the year keeping a close watch on fuel costs although we now see some positive changes with aviation fuel being about $110 a barrel, compared to $150 and $160 in the middle of last
year.
The next four to five years will continue to be very active for Jazeera with significant growth
anticipated driven by the strength of our
existing business model. By 2026 or 2027, we see our fleet expanding to 35, which means we will be serving more than 100 destinations. All of these are destinations that we have already evaluated, and we see them as value accretive to our network and our profitability. We also
plan to cross the 80% mark for average annual load factor over the coming three years.
Lastly, we are continuing to focus on our growth plans for infrastructure and are working closely with regulators as well as all concerned
government entities to secure further
expansion. This development will allow us to continue providing services to our increasing number of passengers while contributing to the overall infrastructure of the Kuwaiti aviation sector.
Yours sincerely,
Rohit Ramachandran
Chief Executive Officer
3
FINANCIAL & OPERATIONAL HIGHLIGHTS
PASSENGERS | LOAD FACTOR | UTILIZATION | YIELD |
3.6 MILLION | 77.0% | 12.9 HOURS | KD47.9 |
+247.5% | +10.2% | +118.1% | -35.1% |
FY21: 1.0 MILLION | FY21: 66.8% | FY21: 5.9 HOURS | FY21: KD73.9 |
19AIRCRAFT | 15NEW ROUTES |
+2 IN 2021 | 58 TOTAL ROUTES |
OPERATING REVENUE | OPERATING PROFIT | NET PROFIT |
KD182Æ1MILLION KD26Æ8MILLION | KD20Æ1MILLION | |
+126.5% | +148.4% | +183.6% |
FY21: KD80.4 MILLION | FY21: KD10.8 MILLION | FY21: KD7.0 MILLION |
*FY22 includes a one-off gain of KD1.7 million for the sale and leaseback of two engines against the sale and leaseback of one engine in FY21 for KD0.4 million.
*FY22 includes a non-operating revaluation impact of future IFRS 16 lease liabilities of KD1.9 million against a gain of KD0.7 million in FY21.
.COM
CARGO REVENUE | ANCILLARY REVENUE | E-COMMERCE REVENUE |
KD2Æ0MILLION | KD15Æ4MILLION | KD41Æ3MILLION |
-14.9% | +96.9% | +162.6% |
FY21: KD2.3 MILLION | FY21: KD7.8 MILLION | FY21: KD15.7 MILLION |
4
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Jazeera Airways Co. KSC published this content on 14 March 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 March 2023 08:44:08 UTC.