Kuwait’s Jazeera Air says it is still a going concern despite losses of $50.7 million during the first nine months of 2020, as the global COVID-19 pandemic continues to take a toll on the global aviation industry.
Along with routine financial results, the airline released a COVID-19 impact statement to Boursa Kuwait, in which it referred to ‘gross underutilization’ of assets – its aircraft and terminal – and a net worth erosion of KD 18.753 million ($61.223 million).
The statement said the group had carried out an assessment of whether it was still a going concern, warning there was a risk that a further wave of the pandemic could bring prolonged impact on air travel.
“At the present time the projections show that the Group has sufficient resources to continue in operational existence and its going concern position remains largely unchanged from 31 December 2019,” the statement continued.
The airline’s third quarter results for 2020, published today, showed a loss of KD 15.542 million ($50.7 million) during the first nine months of 2020, compared with a profit of KD16.142 million ($52.7 million) for the same period last year.
The company listed a series of mitigation measures, including reduction of employee head count, and a 50 percent salary reduction for seven months for remaining employees, starting from March 1.
The exact number of employees who have lost their jobs as a result of the pandemic was not revealed in the statement.
Other measures included seeking fee waivers from the Kuwait government for airport authorities and government organisations, as well as drawing down on a previously untapped Murabaha facility, to build a war chest to measure the challenges.
“The Group has a sound liquidity position with KD 23.3 million ($76 million) of available funds,” the statement said.