El Al posts $12.3 million profit in third quarter

NEW YORK (Press Release)—EL AL Israel Airlines held a press conference Wednesday to announce a net profit of $12.3 million in the 3rd quarter (July thru September) despite the ongoing financial crisis, increased competition, reduced revenue generated from ticket sales in all classes of service, tremendous losses in the international aviation industry, as well as the worldwide collapse of the cargo market.

EL AL President Haim Romano pointed out that this financial success is due to an aggressive marketing strategy, a reduction of expenses, and an increase in direct ticket sales which resulted in increased market share and a higher load factor.

At the conference, Romano stated, “These positive results are proof of the power of the EL AL brand and the continued loyalty demonstrated by our customers.” Romano also stated that a central focus of EL AL in these difficult times is to maintain stability while exploiting the airline’s many advantages, such as being flexible to meet the market demand.

Revenues in the third quarter total $496.1 million, a reduction of almost 20 percent as compared to the parallel quarter last year.  The gross profit is $95.4 million, almost 29 percent compared to the third quarter in 2008.  The overall cargo market into and out of Israel dropped by about 15 percent, yet EL AL cargo experienced a 2 percent market share increase.

Due to increased efficiency, EL AL management and general expenses dropped in this quarter by $3.3 million to $21.1 million. Fuel costs were reduced by $78.7 million for a total expenditure of $136 million this quarter (after considering hedging costs of about $18.6 million this quarter). Cash flow in the third quarter totaled $18.8 million as compared to $11.3 million during the same time period last year.

In this quarter, there was also a 6 percent growth in passenger traffic. And, EL AL maintained a higher load factor out of Ben Gurion Airport than the average of all foreign carriers, even though their capacity increased by approximately 7 percent.

Romano also discussed future plans to expand the fleet. Four new state-of-the-art  extended range Boeing 777 aircraft are on order and are expected to join the EL AL fleet in 2012/early 2013 at a cost of approximately $540 million.  These 777s will be utilized on the nonstop USA/Israel route.  Also on the agenda is to develop partnerships with additional airlines so that Israel becomes more of a global hub.

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Preceding provided by El Al