By Aryeh Stern
El Al Airlines has once again broken its previous records, recording a net profit of $147.4 million for the second quarter of 2024, an increase of 84% compared to the profit of $80.5 million in the first quarter, the airline’s best quarter to date. Compared to the second quarter of 2023, the growth is even more significant, as the profit is 2.5 times higher than the $58.9 million recorded then.
The airline’s revenue in the second quarter of this year was $839 million, up 33% from $630 million in the second quarter of 2023. In the first quarter of 2024, revenue was $738 million. El Al attributes this growth in part to a $29 million increase in cargo business, doubling revenue from that source, but the majority of the growth came from the passenger business.
The significant improvement in El Al’s financial performance coincides with a period of higher prices for last-minute tickets. With many foreign airlines cancelling flights to and from Israel, travelers have limited options, giving El Al a quasi-monopoly position in the market. The airline’s seat load factor reached a record high of over 92%, compared to 87% in the corresponding quarter of 2023. Revenue per available seat kilometer (RASK) increased by 24% compared to the same period last year, while available seat kilometers (ASK) increased by 8%.
Despite criticism of the price increase, El Al stated that the increase mainly affects last-minute ticket prices and recommended that travelers book flights well in advance. However, as other airlines cancel flights at short notice, this advice is not always feasible. El Al also claims to have taken steps to limit the price increase.
El Al’s cash flow from operating activities was $391 million in the second quarter, a significant increase from $119 million in the corresponding quarter last year.
El Al has officially announced its largest contract in history. The agreement provides for the purchase of up to 31 Boeing 737 MAX aircraft for up to $2.5 billion. “This contract represents another step in the implementation of our strategic plan and will enable the expansion of our destination map, increased frequency of flights to existing destinations and an improved flight experience,” the company stated. The contract includes the purchase of twenty 737 MAX aircraft with an option for eleven more. These new aircraft will replace El Al’s existing 737-800 and 737-900 aircraft. Deliveries will begin in 2028.
El Al also managed to reduce its equity deficit. At the end of the second quarter of this year, equity stood at $201 million, compared to a deficit of $91 million at the end of the previous quarter and $209 million at the end of last year. This improvement is due to the company’s high net profits, a share issue of $140 million and the exercise of warrants totaling $39 million.
In addition, the airline has significantly reduced its net debt to $611 million, from $1.4 billion at the end of 2023 and $2 billion at the end of 2019.
