El Al Airlines Boeing 737-900ER
El Al Israel Airlines posted a first-half net loss of $23.4 million, narrowed from a net loss of $28.8 million for the same period a year ago. The Israeli national carrier warned that the current hostilities in Gaza were likely to prove substantially detrimental to the airline’s next set of results.
First-half revenues rose by approximately 3%, to $986.9 million.
Operating expenses in the first half were $864.7 million, up by around 3%, which the carrier attributed to an increase in operations. Fuel costs were down 1.5% compared to the year-ago half.
Second-quarter net profits climbed to $16.3 million, a significant rise on the $3.7 million posted in the year-ago quarter. Revenues were $571.5 million for the quarter, up 8% year-over-year. Internet sales showed a marked rise of around 20% compared to the 2013 second quarter. Load factor was up 2% at 84.4%.
“The results of the second quarter of 2014 are a reflection of the continued adaption of operations to the business environment,” CEO David Maimon said. “In 2014, the Passover holiday was in the second quarter. El Al continued to significantly increase its operations, the supply of seats being increased by 13% compared to the equivalent quarter in the previous year, with only a slight increase in operating expenses of about 4%.”
He noted that in the second quarter El Al set up a new low-cost carrier, UP, which began services to Berlin, Budapest, Larnaca, Kiev and Prague.
Maimon said the effects of what Israel refers to as Operation Protective Edge—aimed at countering rockets fired into Israel from the Palestinian territory of Gaza—had led to cancellations and a drop in bookings. El Al estimated that “revenues in the third quarter of 2014 are expected to be reduced by about $55-$65 million, which will have a considerable detriment affect [sic] on business in the third quarter.
“As a result of the negative effect of the Operation Protective Edge on the local aviation industry, the company, together with other Israeli airlines approached the relevant government ministries requesting to receive compensation from the state.”