El Al reports record profits amid war, as Israeli public decries high prices

The airline has benefitted significantly from being the only carrier consistently flying in and out of Israel in recent months; CEO denies intentional price gouging

El Al airplanes on the tarmac at Israel's Ben-Gurion International Airport, October 4, 2022. (Moshe Shai/ Flash90/ File)
El Al airplanes on the tarmac at Israel's Ben-Gurion International Airport, October 4, 2022. (Moshe Shai/ Flash90/ File)

El Al Israel Airlines posted higher fourth-quarter profits from 2023, boosted by the Israel-Hamas war, which saw the flag carrier mobilize to bring Israelis to and from the country as rivals canceled flights to Tel Aviv.

Israel’s flag carrier gained from being one of the only airlines with regular flights after most foreign carriers halted services. Some, such as Lufthansa, Swiss, and Air France, have resumed their Israel routes on a limited basis, while United and British Airways plan to restart flights soon.

El Al CEO Dina Ben-Tal Ganancia told Reuters on Thursday that the fourth quarter of 2023 was “a roller coaster,” citing the initial shock of the October 7 attacks on Israel by Hamas terrorists, in which some 1,200 people were murdered and 253 others were taken hostage, as well as the need to repatriate military reservists and rebook passengers.

“The recovery came fast in December and we see the [positive] trend is going into the first quarter,” she said.

El Al said on Thursday that it earned a net $39.7 million in the October-to-December period, up from $8.5 million a year earlier, while revenue rose to $678.8 million, from $570.7 million — pushing its shares up some 5%.

Net profit for 2023 rose to $116.7 million from $109.4 million in 2022. Revenue hit a record $2.5 billion, up 26% versus 2022.

File: Passengers at the Ben Gurion Airport near Tel Aviv, on December 26, 2023. (Arie Leib Abrams/Flash90)

The number of passengers El Al flew last year rose 32.5% to 5.5 million for a 26.3% market share at Ben Gurion Airport, Israel Airports Authority data showed.

The Israeli public has expressed frustration with the airline on social media, complaining that El AL took advantage of its newfound monopoly and hiked up prices. However, an investigation by Israel’s Channel 13 confirmed that while El Al is not always the cheaper option, its prices have not changed in a way consistent with claims that the company is taking advantage of the war to price-gouge.

“Ultimately,” Ben-Tal Ganancia told Channel 13, “this notion comes from situations in which people [book tickets] at the last minute, or from people whose flights were canceled by another airline,” forcing them onto a more expensive El Al flight.

While competition has intensified in recent years, Ben-Tal Ganancia told Reuters that cancelations by rivals will help El Al even beyond the current period.

“People now understand that El Al is a safe bet to book a flight so they’re now coming back for future dates,” she said. “We are the bridge from Israel to the world.”

Still, demand has waned, and most travel is coming from the United States, mainly missions to support Israel, with travel to Europe mostly to nearby Greece and Cyprus, she noted.

El Al has stopped routes to Johannesburg, Dublin, and Istanbul — all located in the countries that have been most critical of Israel amid the war, leading to a drop in Israeli travel — and boosted US flights.

“We are adjusting our network to where there are demands,” Ben-Tal Ganancia said.

El Al still aims to buy around 30 short-haul planes to replace its aging fleet, and while the war has delayed a decision, the airline is still in talks with both Boeing and Airbus, Ben-Tal Ganancia said.

“There are a lot of issues with the supply chain and the fact that we are in a war has delayed our discussions a little bit, mainly because the relevant people were not eager to come to Israel.”

“It’s 50-50,” she said of the decision between the two aircraft makers.

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