El Al inks $2.5B deal with Boeing to purchase 31 737 MAX aircraft as profit surges amid war
El Al inks $2.5B deal with Boeing to purchase 31 737 MAX aircraft as profit surges amid war
The new planes will replace the airline's current short-haul fleet of ageing Boeing 737-800 and 737-900 aircraft.
El Al Israel Airlines said on Thursday it had signed a deal with Boeing for the purchase of up to 31 737 MAX aircraft worth as much as $2.5 billion.
El Al, Israel's flag carrier with an all-Boeing fleet, said the agreement includes the purchase of 20 737 MAX airliners for $1.5 billion and options for 11 more.
Delivery is expected to begin in 2028, although the carrier said it would consider bringing forward the operation of several 737 MAX aircraft to as early as 2027 through a dry lease.
The new planes will replace the airline's current short-haul fleet of ageing Boeing 737-800 and 737-900 aircraft.
El Al also reported on Thursday a 33% increase in revenue for the second quarter of 2024, reaching $893 million. The airline's net profit more than doubled, rising 2.5 times compared to the same quarter in 2023, amounting to $157 million. Operating profit (EBITDA) surged by 72% compared to the corresponding quarter, reaching $281 million.
El Al's financial results reflect the period before the current aviation crisis, which saw the suspension of operations by dozens of foreign airlines in Israel due to threats from Iran and Hezbollah following the killing of senior terrorists in Tehran and Beirut.
Even before the recent wave of flight cancellations, many airlines had already ceased operations in Israel, leading to increased demand for El Al flights. According to El Al CEO Dina Ben Tal Ganancia: "In the second quarter, Israelis were seeking aviation certainty, and demand for El Al flights remained strong, even as foreign airlines gradually returned before the current cancellations by some foreign carriers operating in Israel. We operated vigorously during the quarter and continue to do so, increasing the number of flights and making commercial and operational adjustments, while fully utilizing our aircraft fleet and air crews."
Amid rising flight prices at El Al, the Competition Authority has launched an investigation following complaints of price gouging and exploiting the situation. The investigation, which began last April, is still ongoing.
