El Al Israel Airlines Ltd. (TASE:ELAL) continued to benefit from the war in the first quarter of 2024. The Israeli carrier reported profit of $80.5 million in the first quarter of 2024 compared with a net loss of $34.4 million in the corresponding quarter of 2023. The first quarter financial results were the best ever financial results in a single quarter in the company's history. $80.5 million represents two thirds of the net profit for full year 2023, which was one of the best years in the company's history.
The reason for these unprecedented results is that following the cancellation of flights by so many foreign airlines, El Al has become a 'de facto' monopoly on many major routes to and from Israel. El Al was responsible for 62% of the passenger traffic at Ben Gurion airport in the first quarter of 2024, according to the Israel Airports Authority, compared with 22% in the first quarter of 2023.
El Al, controlled by the 47.4% stake of the Rozenberg family, reported revenue of $738 million in the first quarter of 2024, up 48% from $500 million in the corresponding quarter of 2023, and higher revenue than the second and third quarters last year (the summer quarters), which are traditionally the strongest.
The company said, "Due to the fact that the war brought about significant changes in the movement of passengers in Israel and in the offer of flights in the market, the demand for the company's flights in the first quarter of 2024, despite the gradual return of foreign airlines, continued even stronger and even increased.
"The company is experiencing increased demand for its flights in relation to the seat capacity it can offer, and is continuing its operational efforts to increase the supply of flights as much as possible, within the limits of its capacity, and is making commercial and operational adjustments. Because of this, the traditional seasonal trend, in which the winter months see low passenger traffic, was not reflected in the current quarter, and therefore this period was characterized by demand levels that the company experiences in peak seasons in normal times."
El Al also believes that the second quarter will continue to be strong. The company said, "Due to the relative increase in passenger traffic in Israel during Passover and towards the beginning of the summer period, and despite the continued gradual return of foreign airlines, an increase of about 4% is expected in revenue per seat kilometer (RASK) in the second quarter of 2024, compared with the first quarter of 2024, which together with the increase in activity as described above, may have a positive effect on the business results for the second quarter of 2024."
Published by Globes, Israel business news - en.globes.co.il - on May 29, 2024.
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