The third quarter results of El Al Israel Airlines Ltd. (TASE: ELAL) were predictably hit by Operation Protective Edge in Gaza in the summer, which affected the entire Israeli tourist industry.
In July, El Al announced that there had been many flight cancellations by both foreign and Israeli passengers, as well as a decline in bookings, which it attributed to Operation Protective Edge, during which rockets were constantly being fired at Israel. The airline projected a $60 million decline in revenue for the period.
This morning, El Al reported third quarter revenue of $601.2 million, compared with $643.3 million in the corresponding quarter of 2103, representing a decline of 6.5%. Revenue from passenger fares fell by 7.3%, while revenue from cargo grew 4.5%.
Operating expenses rose 2% to $493 million, compared with $483.6 million in the corresponding quarter. The rise was mainly due to higher fuel costs and higher landing and transit fees, partly offset by lower salary and security costs. The fall in salary costs was due to the effect of the devaluation of the shekel against the dollar on the company's commitments to employee benefits. The company's workforce, both permanent and temporary, averaged 6,216 during the third quarter of 2014, compared with 6,109 in the corresponding quarter.
El Al's market share at Israel's Ben Gurion Airport was 33.8% in the third quarter of 2014, compared with 30.2% in the corresponding quarter, and its seat occupancy rate was 82.1%, compared with 84.8% in the corresponding quarter. Internet sales grew 30% in comparison with the corresponding quarter.
Operating profit was $29.1 million in the third quarter of 2014, compared with $75.6 million in the corresponding quarter. Finance expenses totaled $15.4 million, compared with net finance income of $5.2 million in the corresponding quarter, mainly because of the results of currency hedging operations.
El Al posted a net profit of $10.1 million in the third quarter of 2014, compared with $57.9 million in the corresponding quarter of 2013, representing an 82% decline.
Published by Globes [online], Israel business news - www.globes-online.com - on November 25, 2014
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