El Al pressed into offering cheaper fares to 4 destinations

Israeli airline CEOs El Al Israel Airlines Ltd. (level:Ilal), Israel (TASE: ISRG), and every day Today he was summoned to meet with Economy and Industry Minister Nir Barkat due to the sharp rise in airfare prices. Israir CEO Uri Sirkis was the first to meet with Barkat this morning, followed by El Al CEO Dina Ben-Tal Ganansia.

Ben-Tal-Ganansia and Barkat agreed that El Al would offer relatively cheap round-trip tickets to four destinations from which Israelis could fly elsewhere. The round-trip fares to the four destinations are Athens, Greece ($299); Larnaca, Cyprus ($199); Dubai, United Arab Emirates ($349); and Vienna, Austria ($349). These are the flights that will be added to El Al’s schedule, with tickets on sale at these prices until roughly the end of 2024.

El Al also pledged to reduce prices on other flights that have seats available, of which there may not be many due to limited supply and high demand from Israeli passengers.

In this way, Ben-Tal Ganansia and Barkat reached an agreement that will allow Israelis to take vacations abroad and business trips without the need for the ministry to intervene in El Al’s flight prices around the world. “We continue to work to increase the supply of seats as much as possible and expand the flight schedule,” Ben-Tal Ganansia said. “This move will allow us to offer tens of thousands of seats at reasonable and pre-known prices, and provide a broad response to destinations that are points of connection to different continents.”

The last quarter of the company

Earlier this week, El Al surprised investors with impressive second-quarter results — $147 million in profit, up 84% from the first quarter of 2024 and “the best quarter in its history,” according to management. The trend is expected to continue in the third quarter, after more and more foreign airlines have recently suspended flights to Israel, over fears of an Iranian attack.

So upcoming reports from El Al, controlled by Kenny Rozenberg, are expected to show equally high profits. In the first half of 2024, El Al posted a nearly 40% jump in revenue to nearly $1.6 billion, and net profit of $226 million, more than ten times the profits in the first half of last year.

The biggest winner was Rosenberg. About four years ago, after the Covid pandemic struck, El Al’s continued operations were threatened when scheduled flights were suspended for all airlines worldwide. Auditors even attached a “continued operation” clause to the company’s reports. The state quickly came to El Al’s aid, with hundreds of millions of dollars, along with a capital injection from new controlling owner Rosenberg, to plug its cash gaps and allow the airline to meet its obligations, despite the crisis.

Since the beginning of 2024, El Al’s share price has jumped 66%, with the company’s market value reaching NIS 2.4 billion. In the past three years, the share price has risen 120%, as it recovered from the Covid crisis. But over the past five years, even before Covid, the share price has returned a meager 2%.

This article was published in Globes, Israeli Business News – en.globes.co.il – on August 21, 2024.

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