El Al profits skyrocket as foreign airlines cancel Israel routes during war
El Al profits skyrocket as foreign airlines cancel Israel routes during war
With fewer competitors in the Israeli skies, El Al posts 44% revenue growth and record-high occupancy rates.
El Al Airlines announced strong third-quarter results on Wednesday, with revenues reaching $1 billion—a significant 44% increase compared to the same period last year. The net profit surged by an impressive 258% to $185 million. This robust performance is largely attributed to the withdrawal of many foreign airlines from operating flights to and from Israel, making El Al the primary carrier in the country during this period.
The airline's load factor also reached a record high, climbing to 93.8% in Q3, compared to 92.4% in the previous quarter and 88.1% in the same quarter last year, prior to the conflict.
El Al CEO Dina Ben Tal Ganancia addressed the challenges and opportunities created by the current global aviation landscape, stating, “They ask me, 'Why don't you bring more planes?' The answer is simple—there are none. We are not alone in this story.” She noted a global shortage of planes and pilots, compounded by production delays at major manufacturers like Boeing and Airbus. Airlines worldwide are reportedly canceling routes due to a lack of engines.
Ben Tal Ganancia explained that foreign airlines have diverted their planes to other routes where demand is also high. “Some foreign airlines have canceled flights to Israel for the long term because they have alternatives. The demand for flights, combined with shortages of planes and pilots, is a global issue,” she said.
El Al had priced four destination hubs at lower rates to encourage Israelis to connect through these locations. However, this strategy faced hurdles. "Many flights were quickly purchased and sold out," she explained. "Some tickets were bought for vacation purposes, and connecting flights to other destinations are not cheap due to rising global airfare prices."
The financial health of El Al has also dramatically improved. As of September 30, 2024, the airline’s cash reserves stood at $1.25 billion, a significant increase from $406 million at the start of the year. Meanwhile, its net financial debt was reduced to $376 million, compared to $1.43 billion at the beginning of the year. El Al’s CFO highlighted, “We are starting to see income from interest, something we haven’t had in a long time.”
Additionally, average revenue per paying passenger rose by 2.4% from the previous quarter and by 15.9% compared to the same period last year.
To address ticket shortages and offer affordable pricing, El Al recommends that customers book their flights at least six months, or even a year, in advance.
