El Al posts record profit as foreign carriers stay away and public pays sky-high fares
Israel’s flag carrier gains from being the only airline flying in and out of Tel Aviv on many routes as foreign carriers are sluggish to resume services amid Gaza war tensions
Sharon Wrobel is a tech reporter for The Times of Israel.
With a majority of foreign carriers not resuming their full flight services to Israel, El Al Israel Airlines posted a quarterly record profit benefiting from “unusual demand,” while the Israeli public continued to pay sky-high airfares.
El Al posted a profit of $80.5 million in the first three months of the year, after incurring a loss of $34.4 million during the same period a year ago. Revenue jumped 48 percent in the first quarter to $738 million year-over-year and was up 9% over the last three months of 2023 as the war with the Hamas terror group broke out on October 7.
El Al has been facing harsh criticism in recent months charging the Israeli public exorbitant airfares as foreign airlines, including low-cost carriers, canceled routes last minute during the ongoing war, while the government has continued to provide billions of dollars to Israeli airlines to cover insurance costs against war risks.
El Al CEO Dina Ben Tal Ganancia dismissed criticism that El Al has taken advantage of the aviation crisis situation to keep airfares inflated, arguing that they are a matter of supply and demand as well as the need to save space for last-minute diplomatic needs.
Israel’s flag carrier benefitted from being one of the only airlines with regular flights after most foreign carriers halted services, which has pushed up airfares by more than 100 percent for the Israeli public, while tourists have mostly stayed away since the brutal assault by Hamas on southern Israel on October 7.
“The main reason foreign carriers, especially US airlines have not resumed operations is that their crews are refusing to stay over in Israel because of the war, in addition to the higher insurance risk premium they would need to pay,” Mark Feldman, CEO of Ziontours Jerusalem, told The Times of Israel. “El Al is operating in this vacuum and is charging very high prices because they are a safe bet for Israelis, and because they can — as they are a private business.”
“Still, there are cheaper air travel alternatives for Israelis who are willing to book indirect flight routes,” Feldman remarked.
Some foreign carriers, such as Lufthansa, Swiss, and British Airways, have resumed their Israel routes on a limited basis, while US carriers, including United Airlines and Delta Airlines, as well as Air Canada said they plan to resume flights in June.
“Even as foreign carriers are planning to resume their routes to Israel in coming weeks, if you look at airfares for Sukkot, they are astronomical, meaning that they are matching prices with El Al,” said Feldman.
El Al said that in the first three months of the year, as opposed to a standard winter season with a low level of passenger traffic, the demand for flights was especially high relative to the seat capacity it could provide.
“About eight months after the outbreak of the war, the Israeli aviation industry is still experiencing instability due to the ongoing cancellation of flights to Israel by foreign airlines,” said Ben Tal Ganancia. “This situation creates a true crisis among Israeli consumers who ordered tickets from these companies and, in many cases, are left in the lurch and contact EL AL at the last minute.”
Ben Tal Ganancia urged foreign airlines to resume flights to Israel and “restore stability to the regional aviation market.”
Reuters contributed to this report.
