CEO Dina Ben Tal (center) at the presentation of the report, and to the right Yaakov Shahar and Shlomi with Shalom
El Al Airlines today presented the financial report for the first quarter of 2023, which shows an incredible trend of improving profitability in the airline after a long period of losses. El Al completed the most successful winter season since the company’s privatization in 2005. Sales amounted to 674 million dollars, which indicates the continuation of the stabilization trend after the Corona crisis. This was reported today by the company’s management in a presentation to investors, El Al employees and journalists, which was moderated by VP Shlomi Am Shalom.
The CEO of El Al, Dina Ben Tal Gannasia, proudly stated that the revenues in the first quarter amounted to about 500 million dollars, which reflects a growth of 17% compared to the corresponding period in 2019 before the corona virus. For the first time since 2005, El Al moved to an operating profit of 9 million dollars. According to her, in terms of operating profit before financing expenses and tax (EBITDA) El Al has increased fourfold. These results are particularly impressive in light of the fact that the company currently operates at only 93% capacity. The output rate in the first quarter was the same as in the summer, even though the winter season is considered the weak season of the aviation industry.
The rate of orders in the four rolling quarters give an indication of demand that teaches about stability and a sales rate of over 2.5 billion per year. “It fits the goals we set for ourselves,” concluded Dina Ben Tal.
The CFO, Yaacov Shahar, presented the liquidity situation, saying that EBITDA reached 60 million dollars compared to 16 million in the corresponding period last year. This is a 4-fold increase, which arouses admiration especially in view of the challenges in the macroeconomic environment in which the world’s airlines operate. Jet fuel prices have increased by 31%, and the employee salary component also increased with additional inputs, and despite this the operating profit increased and did not decrease. Yaacov Shahar presented a different method of structuring the report according to the essence of the expense to give a clearer picture and compare to other airlines.
“Despite the challenging macro environment, we managed to cut the net loss, move to an operating profit and make a significant jump in revenues, despite a production capacity of 93%. However, the most impressive figure is our strong cash flow, which amounted to 73 million dollars, which allows us financial flexibility as well as space Better for the realization of our new strategy.’
Later in the presentation, CEO Dina Ben Tal returned to speak and presented an update on El Al’s strategic policy. She explained that today a quarter of the passengers in NetBev fly with El Al. NetBev is expected to grow in the coming years to 33 million passengers per year, and El Al wants to maintain the ratio that one out of every four passengers will be its customer in the future as well. For this purpose, it established a policy to equip itself with additional planes and new destinations. Its goal is to reach a fleet of 60 aircraft by 2028.
This year El Al is about to receive the 16th Dreamliner aircraft, and in the middle of next year the 17th 787 aircraft. In total, it will have 22 such aircraft. The number of narrow-body aircraft will also increase. Today, the company has 24 Boeing 737 aircraft, and by 2028 it will reach 31 narrow-body aircraft. El Al has already published an RFP for the aircraft and engine manufacturers to renew the narrow-body aircraft fleet, including Airbus The average age of the fleet will be less than 9 years.
The target network has already begun to increase in the company. They recently opened new lines to Tokyo and Dublin, and added a line to Miami. The company returns to flying to India (to Mumbai and New Delhi), and soon new routes to Australia and the Philippines will be inaugurated, made possible by the Abraham agreements.
One of the interesting innovations in El Al’s policy is the entry into the field of tourism. Until now, El Al focused on its expertise in the field of aviation only. Recently, a cooperation agreement was reached with the Ista company to jointly market also packages of accommodation in hotels and organized trips and entrance tickets to tourist sites. Dina Dental predicts that the tourism sector will make up about ten percent of El Al’s revenues in the coming years.
Dina Ben-Tal summarizes: “The first quarter is an excellent starting point for us, and from here we will only increase the pace. We are focused on the implementation of the new strategy with a flexible, efficient and mature organization for the process, which will eventually become a strong financial and cash flow company, and broader in terms of the variety of services and products; with an increase Strong in the occupancy rate to 85.3%, we see that the public continues to choose El-Al and we do everything to give them the best service and the highest value for money in the industry.”
To read the full report, click here.
