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THERE ARE PLENTY OF REASONS WHY ONE COULD FEEL SYMPATHY for Royal Jordanian Airlines. It is located in a region marked by recurring political unrest, it is based in a country without any oil or gas reserves and it built its long-haul expansion and future on a single fleet type, the 787 Dreamliner, which has been delayed more than three years. Added to this list of challenges is the fact that in February 2010 its Exclusive Routes Agreement granting it sole authority to operate to international destinations out of Amman expired (it was signed in 2002 between RJ and Jordan's Civil Aviation Regulatory Commission ahead of the airline's privatization).
Then in December 2010, the government signed a comprehensive air services agreement with the EU that will integrate Jordan into a Common Aviation Area. Following a phased-in liberalization period, all of the approximately 150 EU-registered airlines will be able to operate direct flights to Jordan from anywhere in the EU without restrictions on fares, routes or flight frequency. Jordanian carriers will have equivalent rights, although there are fewer than 10 of them of which all but RJ are quite small. EU carriers will be allowed to set up subsidiaries in Jordan or acquire Jordanian airlines, and vice versa for Jordanian carriers in the EU.
Self-pity, however, is not in RJ's DNA - quite the opposite. It tenaciously embraces the long-established wisdom of "Where there's a will there's a way" and in recent years it has proven that size and well-funded state ownership are not prerequisites to success in the Middle East. It grew scheduled passengers 50% over the past five years from 2 million in 2006 to 3 million in 2010, and with the exception of 2008, a difficult year for the whole industry, it has been consistently profitable since 2004.
It also has been a regional trendsetter, becoming the first airline in the Middle East to join a global alliance (oneworld in March 2007) and the first to successfully conduct an initial public offering (December 2007) through which the government sold 71% of RJ's total issued share capital, raising JOD164.5 ($232 million). Eight percent of the shares were allocated to RJ employees. The Jordanian government still has a 26% holding and the country's armed forces...