El Al flies to a loss in Q2 as higher fuel prices bite

posted on 16th August 2018 by Justin Burns
El Al flies to a loss in Q2 as higher fuel prices bite

Israeli carrier El Al Israel Airlines posted a net loss in the second quarter (Q2) of 2018 of $18.2 million after making a profit of $16.4 million in Q2 of 2017 as higher fuel affected performance.

Despite this, revenues grew one per cent in Q2 to $547 million, up on the $541 million in Q2 last year. EBITDA amounted to $25.4 million compared to $70 million in Q2 of 2017.

The load factor in Q2 was 83.5 per cent compared to 84.3 per cent in Q2 last year. Available seat kilometer (ASK) increased by about three per cent and revenue passenger kilometre (RPK) increased by about two per cent. Average total income per RPK (yield) dropped by about one per cent.

In the first six months of the year, El Al made a net loss of $62.1 million compared to a net loss $13.6 million in the first six months of 2017. Operating revenues grew five per cent were $1,007 million compared to $959 million in the same period of last year.

El Al chief executive officer, Gonen Usishkin said the carrier had to cope with the “challenges and the intensified and increased competition posed by foreign airlines, in particular low cost airlines” along with sharp “increases in fuel prices”.

He said the airline continues to implements its ‘Dreamliner Acquisition Program’ and has received six aircraft, the last of which arrived this week and it will receive another aircraft by the end of 2018.

Usishkin said demand for seats on Dreamliners is “high” and customer satisfaction “meets the company’s expectations”.

He added: “Sales of airline tickets to European destinations commenced in the second quarter for flights starting in October, based on our new sales model of which we have already announced.

“The new model allows the passenger to choose the flight package best suites to his needs, to all destinations in Europe, and pay for the package based on his choice. This model is expected to enhance EL AL’s ability to more efficiently compete with all players in the European market, in particular, low cost airlines.

“We keep accelerating the optimization of all wide-body aircraft. To enhance customer service following the acquisition of the Dreamliner fleet, El Al is preparing for an early removal from service of the 767 aircraft fleet by the beginning of 2019.”