El Al's profits continue to soar: The company wrapped up the third quarter with a record profit of $187 million, compared to $52 million in the same quarter last year – a leap of about 258%. In the previous quarter, the second of 2024, the airline also set a record, with net profit reaching $147 million. El Al also broke a revenue record, earning $1 billion compared to $695 million in the same quarter of 2023.
Ceremony for El Al's new Dreamliner jet
(Video: Lior Sharon)
These excellent results are a combination of the summer vacation quarter, during which many Israelis traveled abroad, and the fact that foreign airlines are avoiding flying to Israel due to the war, leaving El Al almost exclusively controlling the profitable routes to the UK and the US. As a result, the company achieved a peak seat occupancy rate of 93.8% in the third quarter, compared to 88.1% in the same period last year.
Israel's flag carrier has repeatedly stated recently that it is unable to meet all the demand. The company notes that the increase in occupancy and a 14% rise in seat supply, made possible by leasing additional aircraft, contributed an additional $48 million to its profits for the quarter.
There is more interesting data as well. The yield per passenger per kilometer increased by 15% due to a change in El Al's destination mix, as it stopped flying to less profitable destinations in favor of routes to London and the U.S. El Al's stock has jumped by about 220% in the past year and is trading on the stock exchange with a market value of approximately $400 million.
The positive results have doubled the company's equity, which only became positive in the last quarter after its crisis years during the pandemic that almost led to its collapse and the issuance of a "going concern" notice in its books. El Al's debt continues to shrink and now stands at approximately $94 million, compared to $357 million at the end of 2023.
El Al CEO: 'There is a global shortage of aircraft and pilots'
CEO Dina Ben Tal Ganancia says that "El Al has been operating in emergency mode for more than a year, with our goal being to ensure the skies remain open between Israel and the world. This is vital for the continuation of economic and diplomatic activities in the country. Aviation is a central lifeline for life in Israel, and with more foreign airlines yet to resume operations, the market will continue to face challenges, and passenger demand will not stabilize throughout all the months of the war, especially in the current quarter. We continue to experience increased demand for El Al flights, significantly higher than the seating capacity the company can offer. We are constantly making operational efforts to increase seat availability as much as possible, in order to find solutions and optimally meet the needs of passengers to and from Israel.
"We continue to manage a strict pricing policy and actively work to cap ticket prices by setting ceiling prices for passengers on round-trip flights to all El Al destinations, in addition to the four destinations we set at a fixed and uniform price – Larnaca, Vienna, Athens and Dubai. This move clarified our understanding that setting a uniform price, combined with flexibility in ticket cancellation, creates availability and convenience for consumers to book in advance, but leads to 'filling up' flights in advance, which does not allow us to manage seat inventory optimally.
"There is a global shortage of aircraft and pilots; those following the performance of airlines have seen a 10% increase in income worldwide due to increased capacity and price hikes. The coming years will be very tight, with companies canceling routes because there are no engines. Only 8% of aircraft orders already submitted globally have been delivered. The Israeli public has chosen Israeli aviation because they dislike the alternative of connections offered by foreign companies that still fly to Israel."
Get the Ynetnews app on your smartphone: