El Al posts higher fourth-quarter profit
El Al Israel Airlines posted a sharp rise in fourth-quarter profit that was partly boosted by bringing military reservists home and rivals canceling flights to Tel Aviv due to the war in Gaza, forecasting a strong start to 2024 as it adjusted routes.
Israel’s flag carrier gained from being one of the only airlines flying to and from Tel Aviv after most foreign carriers halted services. Some such as Lufthansa, Swiss, and Air France have resumed their Israel routes on a limited basis, while United and British Airways plan to restart flights soon.
El Al CEO Dina Ben-Tal Ganancia told Reuters the fourth quarter of 2023 was “a roller coaster,” citing the initial shock of the October 7 attacks and the need to repatriate soldiers and rebook passengers.
“The recovery came fast in December and we see the [positive] trend is going into the first quarter,” she said.
El Al said on Thursday it earned a net $39.7 million in the October to December period, up from $8.5m.n a year earlier, while revenue rose to $678.8m., from $570.7m. – pushing its shares up some 5%.
Net profit for 2023 rose to $116.7m. from $109.4m. in 2022. Revenue hit a record $2.5 billion, up 26% versus 2022, while the load factor was 84%. El Al said it expects a load factor of 93% in the first quarter.
The number of passengers it flew last year rose 32.5% to 5.5 million for a 26.3% market share at Ben Gurion Airport, Israel Airports Authority data showed.
While competition has intensified in recent years, Ben-Tal Ganancia said cancellations by rivals will help El Al.
“People now understand that El Al is a safe bet to book a flight so they’re now coming back for future dates,” she said. “We are the bridge from Israel to the world.”
But demand has waned and most travel is coming from the United States, mainly missions to support Israel, with travel to Europe mostly to nearby Greece and Cyprus, she added.
El Al has stopped routes to Johannesburg, Dublin, and Istanbul and boosted US flights.
“We are adjusting our network to where there are demands,” Ben-Tal Ganancia said.
El Al still aims to buy around 30 shorthaul planes to replace its aging fleet and while the war had delayed a decision, the airline was still in talks with both Boeing and Airbus, Ben-Tal Ganancia said.
“There are a lot of issues with the supply chain and the fact that we are in a war a little bit delayed our discussions, mainly because they were not eager to come to Israel.”
“It’s 50-50%,” she said of the decision between the two aircraft makers. (Reuters)