Wednesday, 21 November 2018

Profits down for El Al Israel Airlines as it releases its third quarter results

Profits continue to fall for El Al Israel Airlines during the third-quarter of 2018, the airline confirmed after releasing its latest results on Wednesday, November21st.

The Company's revenues for the third quarter of 2018 amounted to around USD $642 million, up some 2.5% compared to $626 million the airline achieved during the same periods in 2017. However, despite this rise in revenue the airline saw operating profits fall by approximately 11% to $62 million, last years third-quarter result was $69 million. Consequentially, the net profit was down to $42 million from $49 million.

In the latest figures released by the carrier show that during the first nine months of the year demonstrated a 4% growth in revenues to $1,649 million.  Yet losses reported before tax for the first nine months of 2018 amounted to around $26 million compared to a profit before tax of $47 million for the first nine months of 2017.



Gonen Usishkin, El Al's CEO blamed the fall in profits on increased competition, mainly from low-cost airlines and increased fuel prices. Also having an impact was the previous unsettled relationship the airline had with its staff, however, Usishkin says a new agreement reached with employees is "expected to ensure proper labour relations and create a positive atmosphere of cooperation between the management and pilots." The CEO also cites the purchase of Boeing 787 Dreamliners is going well, "Our Dreamliner aircrafts acquisition program is being implemented as planned, in line with the schedule agreed upon. So far, we received seven aircrafts, the last of which, was delivered at the end of October and, in 2019, we expect to receive seven more Dreamliners. The demand for seats on the Dreamliners is high and customer satisfaction meets the Company's expectations."

The airline is expediting the removal of all of its 767 fleet from operational service,  with the last of the type leaving the fleet in January 2019.

El Al also confirmed it will continue to move its base fares into the format of a low-cost model, with just basic sat only and fees for baggage and other extras to be charged for. The airline sees this as the only way it can "effectively compete with all players in the European market, and in particular, Low-Cost airlines."



 


Highlights for the three and nine-month periods ended September 30, 2018 (in USD millions):

January-September
July-September

2018
2017
Change
2018
2017
Change
Operating revenues
1,649
1,585
4%
642
626
2%
Operating expenses
(1,415)
(1,283)
10%
(508)
(473)
7%
Gross profit
233
301
(23%)
134
153
(13%)
EBITDA
111
190
(41%)
99
109
(9%)
Profit (loss) before taxes on income
(26)
47

54
64
(15%)
Profit (loss) for the period
(21)
35

42
49
(15%)

El Al is also facing a group lawsuit from 180 passengers who are demanding a public apology and financial compensation for a horror flight last week, the Jewish Press is reporting. A flight from New York took off late due to a snowstorm that had delayed the crew from getting to the airport on time. The late departure of the flight would have meant that observant Jews would not have arrived prior to the start of the holy Sabbath in Israel. 
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