Royal Jordanian is seeking compensation from Boeing for the nearly four-year delay of its order for 787 Dreamliner jets.
Royal Jordanian carrier seeks payback
Royal Jordanian is seeking compensation from the US manufacturer Boeing for the nearly four-year delay of its order for 787 Dreamliner jets, its chief executive said.
The airline, one of only a handful of publicly traded carriers in the Middle East, placed an order for 11 of the jets totalling nearly US$2.2 billion (Dh8.08bn) at list prices.
But production delays at Boeing have curtailed the Jordanian airline's expansion plans, costing "a lot of money" in forgone earnings, Hussein Dabbas, the chief executive of Royal Jordanian, said in Singapore yesterday. As a result, the airline was negotiating a settlement with the US manufacturer, he said.
"Our planes are not coming until the first quarter of 2014, and we are still in negotiations with Boeing. This is almost a four-year delay," Mr Dabbas said.
Royal Jordanian joins Qatar Airways, another customer of the delayed jet, in seeking compensation provided under its purchase contract.
The delay in deliveries has benefited Boeing's European rival Airbus, which has enjoyed robust sales of its competing jet, the A330. To remain competitive, Royal Jordanian made up for the 787 delays by leasing three A330s while prolonging the service life of four other Airbus planes already in its fleet, the long-haul Airbus A340.
The International Air Transport Association presented a glum picture for Middle East aviation yesterday, with the region's carriers expected to post a slim $100 million profit in total this year as a result of the regional unrest and high oil prices. By contrast, airlines in the region earned $900m last year.
Royal Jordanian, a member of the Oneworld airline alliance along with British Airways and American Airlines, made a profit of $13.5m last year carrying 3 million passengers. This year, the airline has set its sights on avoiding losses, Mr Dabbas said. "We are hoping to break even - that would be a good result," he said.
After budgeting for an average oil price of $85 per barrel this year, the airline was struggling to cope with the current price of more than $100, the chief executive said.