Kuwait-based Jazeera Airways is evaluating additional narrowbody aircraft orders for its Saudi Arabian subsidiary, even as the airline industry grapples with soaring jet fuel prices and operational challenges stemming from the Iran war.
The carrier’s chief executive described the current crisis as more severe than the disruption caused by the Covid-19 pandemic.
Speaking to The National during the International Air Transport Association (Iata) annual general meeting in Rio de Janeiro, Jazeera Airways chief executive Barathan Pasupathi said the airline is planning to expand its fleet of Airbus single-aisle aircraft ahead of launching domestic and international charter operations from Saudi Arabia in the fourth quarter of the year.
“Further growth is imminent for Jazeera Airways. It’s very clear that the current aircraft numbers are not enough for Jazeera Airways, hence we are at the drawing board,” Mr Pasupathi said. “We need them very soon.”
Although he did not disclose the number of aircraft being considered, Mr Pasupathi stressed the airline’s cautious approach to expansion.
“We’re a very sensible, disciplined airline. You’ll never see Jazeera ordering 200, 300 aircraft,” he said, adding that aircraft models under consideration have yet to be finalised because “everything is on the drawing board”.
He also suggested the airline could consider aircraft from manufacturers other than Airbus if earlier delivery slots become available, as airlines continue to face delays from both Airbus and Boeing.
“We will also not be shy of changing types because if you need aircraft to come in at a certain time faster, then we may have to change types.”
The expansion plans follow the granting of a charter flight licence to Jazeera Airways’ Saudi subsidiary in Jeddah. The operation is expected to connect up to 33 destinations, provide approximately 1.4 million seats and operate a fleet of seven aircraft.
The airline’s growth strategy comes amid widespread disruption across the aviation sector caused by the Iran war. Airlines in the region have faced flight suspensions, airspace restrictions, extended flight paths and sharply higher fuel costs.
“Aviation is facing its biggest crisis in history. It is worse than the pandemic,” Mr Pasupathi said, citing fuel prices exceeding $200 per barrel and widespread shortages affecting carriers.
While the Covid-19 pandemic disrupted airlines globally, the impact of the Iran war has been particularly severe for Middle Eastern operators. According to Iata, airlines in the region are projected to record a combined net loss of $4.3 billion this year, compared with profits of $7.2 billion last year, while airlines in other regions are expected to remain profitable.
Jazeera Airways was directly affected when Kuwait International Airport was shut for 57 days following attacks on the facility. The airport also experienced another temporary closure after strikes in June.
To maintain operations, the airline relocated part of its network to Saudi Arabia in March, initially establishing a base in Qaisumah with five aircraft before later shifting operations to Dammam, according to Mr Pasupathi.
Over a 46-day period operating from Saudi Arabia, the airline transported 200,000 passengers, conducted 9,000 bus trips between Saudi Arabia and Kuwait and maintained essential connectivity for travellers.
The contingency plan, known internally as Mission Barakah, enabled Jazeera to deploy 14 aircraft across 27 destinations. The airline resumed flights from Kuwait on April 26 following the reopening of the airport, although operations remained subject to curfew restrictions.
The disruption significantly affected the airline’s financial performance.
“Between last year and this year, our performance went down by $20 million,” the executive said.
For the first quarter, Jazeera reported a loss of 1.1 million Kuwaiti dinars, compared with a profit of 4.8 million dinars recorded during the corresponding period last year.
At the same time, operating expenses surged. Mr Pasupathi said fuel costs climbed to $220 per barrel, while insurance premiums for flights to conflict-affected destinations approached $50,000 per flight. Additional expenses were incurred through the relocation of operations, transportation services and staff accommodation.
As a consequence, ticket prices nearly doubled compared with the previous year, while fuel costs increased by about 250 per cent. Mr Pasupathi expects elevated airfare levels to continue through the end of the year.
Without fuel hedging protection, the airline implemented a series of cost-cutting measures. These included placing 80 per cent of its 1,600 employees on leave, operating at just 12 per cent of normal capacity, reducing its workforce by around 3 per cent, renegotiating leasing agreements and redeploying aircraft to destinations such as Egypt, where demand increased.
Since then, all staff have returned to work and the airline is now operating about 70 per cent of its regular schedule.
The attacks on Kuwait airport in June resulted in at least one fatality and left more than 60 people injured.
“This sent shivers down everyone’s spine in the aviation ecosystem,” he said.
Iata’s regional vice president for the Middle East, Kamil Alawadhi, has estimated that extensive damage to Kuwait Airport’s Terminal 1 could take up to a year to repair. The terminal primarily serves foreign airlines, while Jazeera Airways operates from Terminal 5.
Looking ahead, Mr Pasupathi said forecasting summer travel demand remains difficult as passengers are making bookings only seven to 14 days before departure.
Despite the uncertainty, Jazeera plans to offer 2.1 million seats during the summer season and has recorded what he described as “very good” demand, particularly on routes serving diaspora communities in Egypt and India.
As one of only two airlines operating in Kuwait alongside Kuwait Airways, Mr Pasupathi expressed confidence in the carrier’s prospects.
“we should do relatively well”.
