El Al profit jumps 370% in wake of war

The war in Gaza has had a positive impact on the fourth quarter results of El Al Israel Airlines Ltd. (TASE:ELAL). With almost all foreign airlines halting flights to and from Israel in the fourth quarter of 2023, El Al had a monopoly on many of the routes to and from Tel Aviv. Consequently El Al had an 80% market share in the fourth quarter of 2023, compared with 22% in the previous quarter.

At the start of the war, El Al twice issued notification that it expects to take a financial hit from the fighting in the fourth quarter of 2023 and the first quarter of 2024 but it has now become clear that the picture is the exact opposite. The company said, “Following the halting of flights by foreign companies and the company’s ability to implement the required adjustments, the company has had stronger demand for its flights than previously estimated, which has positively influenced, together with other factors, the business results for the fourth quarter of 2023. This trend is also continuing in the first quarter of 2024.

Jump of 370% in Q4 2023 profit

In 2023, El Al reported net profit of $117 million, up from $109 million in 2022. In the fourth quarter of 2023, net profit was $39.7 million, up 370% from the corresponding quarter of 2022. Revenue in the fourth quarter of 2023 was $677.8 million, up 21% from the corresponding quarter and operating profit was $161 million, up 58% from the corresponding quarter.

The main question facing El Al is how it will manage to retain a larger market share, as foreign airlines resume flying to Israel. El Al’s share price doubled between October to mid-February. But then it was announced that United Airlines plans to return to Israel at the beginning of March and the Israeli airline’s share price plunged 14% on the day of the announcement.

Turkish carriers Turkish Airlines and Pegasus, which were responsible for 9% of passenger traffic at Ben Gurion airport before the war, are not expected to resume Israel flights until Turkish President Recep Tayyip Erdogan has a change of heart, and Irish low-cost carrier Ryanair is still dithering over resuming flights. But other major carriers like Wizz Air (10% market share), United (2.6%), EasyJet (3%) and Air India (0.3%) are expected to resume flights in March.

El Al’s special campaign to distribute 18,000 tickets to army conscripts and reservists is also part of the airline’s strategy to increase the number of passengers after the war.

Published by Globes, Israel business news – en.globes.co.il – on February 29, 2024.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2024.


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