El Al records best quarter ever, profits from soaring prices, departure of foreign carriers due to war
El Al records best quarter ever, profits from soaring prices, departure of foreign carriers due to war
El Al's revenues in the first quarter rose by nearly 48% compared to the same quarter last year, reaching $738 million. Net profit stood at $80.5 million compared to a loss of $34.4 million in the same quarter last year
The ongoing war, the suspension of air operations in Israel by dozens of international airlines, peak demand against low supply, and high flight prices boosted El Al's revenues in the first quarter by nearly 48% compared to the same quarter last year, reaching $738 million. Net profit stood at $80.5 million compared to a loss of $34.4 million in the same quarter last year.
Due to the cancellation of routes to Israel by foreign airlines, El Al continued to benefit from its dominance at Ben Gurion International Airport, accounting for 62% of all air traffic there during the quarter. This situation also led to a significant increase in its flight occupancy rate, which reached nearly 93% compared to about 85% in the same quarter last year. Passenger flight revenues grew by 43.5% compared to the same quarter last year, reaching $197 million.
El Al's record results for the quarter were also driven by a sharp increase in its air cargo operations, due to the cancellation of cargo flights by foreign airlines and a decline in demand for sea freight, partly because of the Houthi threat in Yemen to maritime traffic in the Bab al-Mandab Strait. Cargo revenues rose to $76 million compared to $40.4 million in the same quarter last year, partly due to the addition of a Boeing 737-800 freighter starting last October.
This is the strongest single quarter in the history of El Al, which is controlled by the Rozenberg family and managed by Dina Ben Tal Ganancia. The record performance in the first quarter comes amid a comprehensive investigation by the Competition Authority, following consumer complaints that El Al is allegedly exploiting the lack of competition in the aviation market during the war to increase its flight prices by up to several hundred percent, especially on routes to Europe and the United States. El Al's CEO addressed the investigation and the allegations of price hikes due to the war, rejecting claims of increasing flight prices by hundreds of percent, and stated that El Al's flight prices have increased on average by 19% compared to the same quarter last year.
Ben Tal Ganancia attributed the price increases to the company's passengers, claiming that about 50% of them paid higher prices in the quarter due to last-minute bookings. She also called on foreign airlines to return to the Israeli aviation market and stabilize it, as their frequent cancellations in recent months have increased the pressure on El Al from passengers whose flights were canceled.
"I cannot accommodate Israelis who wanted to fly with other carriers but had their flight canceled at the last minute, and now want to fly with El Al at the same price and on the same date. In such situations, I cannot add more flights because I don't have additional planes. We've stretched our capacity to the limit, and reserve a limited number of seats on each flight for urgent bookings, without fully booking flights two months in advance. We have not exploited the situation, and if we wanted to, we could have charged more for each flight. We are transparent with the Competition Authority, which has been conducting its investigations at El Al since the beginning of the war, cooperating fully and providing the requested documents."
Ben Tal Ganancia also compared the first quarter of this year to the last quarter of 2022, when Israel was recovering from the COVID-19 crisis. She noted that even then, the average ticket price was almost identical to today's prices, despite more than 70 international airline carriers operating regular flights to Israel at that time. She added that even without the war, which caused dozens of carriers to leave Israel, benefiting El Al, the company would have shown profitability in the quarter due to its adherence to its strategic plan, which includes efficiency measures and capacity expansion.
