Royal Jordanian stalls badly for investors

If you invested in Royal Jordanian a year ago, you would not be a happy punter today, having lost more than 63 per cent of your money.

Jordan's largest transport company by market capitalisation, hit a 52-week low of 0.56 Jordanian Dinars on Tuesday, and was still there yesterday. In the past month the stock has hit a new 52-week low 13 times and in the past three months, 28 times.

The assessment this week of Royal Jordanian by News Bites, the independent financial news website, makes grim reading for shareholders. "Trailing one week: the stock was unchanged twice, fell twice, and rose once. The value of 1,000 dinars invested a week ago is 949 dinars, or loss of 5.1 per cent.

"Trailing one month: the stock fell 11 times, was unchanged seven times and rose five times. The value of 1,000 dinars invested a month ago is 889 dinars, or loss of 11.1 per cent.

"Trailing one year: the value of 1,000 dinars invested one year ago is 368 dinars against 859 dinars for the Amman Stock Exchange index, for a capital loss of 632 dinars. The total return to shareholders for one year is minus 63.2 per cent."

The airline has suspended flights to five destinations from this month, blaming regional turmoil and higher fuel prices, said the state-run Petra news agency. The carrier, based in Amman, will halt flights to Brussels, Munich, Al Ain and two other destinations in the Gulf to be announced soon, Hussein Dabbas, the chief executive of Royal Jordanian told Petra. The airline will also cut the number of its flights to Rome, Vienna, Zurich, Geneva, Amsterdam, Kuala Lumpur and Khartoum, he said.

Royal Jordanian cancelled 1,300 flights last year and more than 460 flights scheduled in the first quarter of this year due to a drop in the number of passengers, he said.

The performance, however, comes against Royal Jordanian reporting a record number of passengers - 268,000 - in January, an increase of 25 per cent.

But soaring fuel prices pushed the airline's fuel bill in January to 23.1 million dinars, compared with 17.7m dinars in the same month last year, an increase of 30 per cent.

dblack@thenational.ae

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