On May 27, 2024, El Al Israel Airlines reported a record profit of more than $80 million in the first quarter of the year after competitors canceled flights due to the Gaza war.
Israel’s national carrier posted a higher fourth-quarter profit on Wednesday, a testament to its strategic decisions during the Gaza war. At times when foreign carriers halted, the flag carrier mobilized to bring back military reservists while its rivals chose to cancel flights to Tel Aviv. This proactive approach significantly contributed to the company’s financial performance.
The airline’s earnings for the October to December quarter were $39.7 million, a significant increase compared to the $8.5 million earned in the fourth quarter of 2022. As per the reports, the Israeli flag carrier said it earned $80.5 million in January-March versus a $34.4 million loss a year earlier. Revenue rose 48% to $738 million, while its passenger load factor rose to 93% from 85%. This boost in profits highlights the impact of the conflict on the airline industry and El Al’s strategic response to the situation.
CEO Dina Ben-Tal Ganancia’s Take On the Company’s Profit
Company CEO Dina Ben-Tal Ganancia reported,
“In light of the instability in aviation in Israel and the increasing pressures on our flights, we continue to work intensively to increase the supply of seats and strengthen flight schedules. We are providing individual responses to specific cases, demonstrating our commitment to customer service even in challenging times.”
She further added,
“We are doing everything in our power to provide an adequate response to the high demands and unusual loads on the company’s service system at a time when some of our staff are still serving in reserve duty and the company is operating on a war routine.”
According to Ganancia, El Al has ended non-performing routes like Johannesburg and Toronto and has boosted flights to popular destinations such as the United States and Asia. Before the conflict, El Al faced fierce competition from foreign carriers, and its market share at Ben Gurion International Airport had fallen to around 25%.
An EL AL Boeing 737-800 taking off
Addressing the public’s concerns, Ganancia clarified that El Al’s pricing strategy is a reflection of supply and demand dynamics and the need to accommodate last-minute diplomatic needs. Importantly, she highlighted that half of El Al’s passengers are paying less than the average price in 2023, demonstrating the airline’s commitment to providing affordable travel options. Furthermore, she added, the other 50% face higher prices, especially those who booked last-minute tickets and those whose flights were canceled by competitors just a few weeks or days before departure.
El Al CEO Dina Ben Tal Ganancia
EL AL has meticulously adjusted its flight schedule, strategically suspending flights to less relevant destinations and focusing more on destinations with greater demand. This careful planning has resulted in nine more weekly frequencies to North America and 22 additional weekly itineraries to Europe in Summer 2024 compared to 2023. EL AL also shared that the current sales pattern has been almost without future sales during the war. In contrast, more than 40% of the airline’s tickets are sold for future flights, as revealed in the investor presentation.