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El Al Israel Airlines rebounds in $106 million 2015 net profit

Posted : 26 March 2016 03:45:09 | By TWO Bureau | Tel Aviv

El Al Israel Airlines rebounds in $106 million 2015 net profit

El Al Israel Airlines posted a $106.5 million net profit for 2015, reversing the loss of 2014 of $28 million as passenger numbers increased 7.6% over the year.

In 2014, El Al saw its profits take a dip by over $55 million following disruptions caused by Israel’s military operations against Palestinian forces in Gaza that summer. Inbound tourism to the region dropped by 20% in the final quarters of 2014.

During 2015, the Israeli flag carrier transported 4.9 million passengers, compared to 4.6 million passengers in 2014. Traffic grew 4% YOY to 19.74 billion RPKs and capacity increased 3.7% YOY to 23.88 billion ASKs, producing a passenger load factor of 82.6%, up 0.1 point YOY. El Al’s cargo traffic for the year was 488.7 million RTKs, up 0.9% YOY.

The number of Israelis flying abroad increased 15.2% YOY to 5.4 million; the number of tourists arriving in Israel during the year dipped 0.8% YOY to 2.5 million.

“Thanks to  a dramatic improvement in operational efficiency due to the low fuel prices, the entry of new aircraft and modular pricing for UP branded flights which increased demand the airline presented record results,” El Al CEO David Maimon said. UP is the low-cost airline operated by El Al.

Full-year revenue for the airline was $2.05 billion, down 1.3% YOY; operational expenses fell 11.6% YOY to $1.59 billion. The carrier’s operating profit for the year was $461.2 million, a 65.5% increase YOY.

El Al attributed the revenue drop as a result of opposing trends. “On the one hand, revenues were favorably affected growth in the number of passengers at Ben Gurion Airport,” the company said. “On the other hand, the company’s revenues were adversely affected as a result of the drop in flight prices mostly due to the increased competition and the impact of the drop in fuel prices.”

Fourth-quarter revenue for the airline was $476.3 million, down 3.4% YOY; operational expenses fell 14.1% YOY to $379.1 million. Fourth-quarter operating profits came to $97.2 million, an 86.7% YOY increase. El Al’s fourth-quarter net profit was $12.2 million, altering its $14.8 million net loss in 4Q 2014.

Following the year’s turnaround in profits, El Al management granted a company-wide bonus of “more than $9 million, in addition to the wage increase and bonuses to employees paid under the wage agreement of June 2015,” the company said. As of Dec. 31, 2015, El Al employed 3,779 permanent and 2,330 temporary employees.

El Al’s owned fleet of Boeing aircraft as of the end of the year comprised six 747-400s, eight 737-900ERs, one 737-700s, six 737-800s, six 777-200ERs and two 737-300ERs, with an average age of 12 years. El Al’s leased aircraft as of Dec. 31, 2015, comprised nine 737-800s and five 737-300ERs, costing El Al approximately $64.2 million in lease fees for the year.

On Oct. 29, 2015, EL Al signed with Boeing the largest aircraft acquisition in the airline’s history, purchasing nine 787-8 and 787-9 Dreamliners with options for 13 additional Dreamliner aircraft, valued at approximately $1.25 billion. Additionally El Al arranged to lease another six Dreamliners from several lessors, including Air Lease Corp. El Al intends to utilize the Dreamliners to replace its 747-400 fleet on its New York JFK/Newark-Israel routes, as well as replacing its 767s on its Boston-Israel and Toronto-Israel routes. The fleet renewal is to begin in the third quarter of 2017, El Al said.

Tags : #El Al, # Airline, # Palestine, # Gaza, # Iseael, # visitor, # tourist, # tourism, # travel, # air travel, # destination, # Tel Aviv, # Boeing, # Boeing 787, # fleet,

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