Israeli flag carrier El Al has reported record profits on the back of rising Middle East tensions, which have led rivals to abandon the country over fears that war could erupt between Israel and Iran and Hezbollah in Lebanon.
The Tel Aviv-based airline reported a profit of US $80 million for the first quarter, which compares to a loss of more than $34 million in the first three months of 2023.
El Al chief executive Dina Ben Tal Ganancia has attributed the dramatic turnaround in the fortunes of the airline to the continuing ‘instability’ of the aviation industry in the region, explaining that El Al has profited on the back of competitors suspending flights to Israel.
Ganancia says El Al would normally expect to see low demand over the winter months, but a lack of competition has seen the airline struggling to increase seat capacity to meet demand.
El Al would normally see a passenger load factor (a measure of how many seats are occupied per flight) of just 85% in the first three months of the year, but between January and February 2024, the passenger load factor hit a ‘remarkable’ 93%.
In the months following this period, a number of airlines resumed operations in Israel, but with tensions rising yet again, foreign carriers have once again drawn back their operations in Israel.
On Sunday, it was reported that American Airlines had decided to delay its planned return to Tel Aviv until April 2025, while Delta and United Airlines also continue to suspend flights to Israel over fears that Iran could launch a retaliatory missile attack on the country.
Several European airlines, including Lufthansa and its affiliated airlines, have suspended flights until August 26 at the earliest, while low-cost carrier EasyJet has extended the suspension of flights to Tel Aviv until March 2025.
Despite the conflict having a positive effect on El Al’s finances, Ganancia has slammed foreign carriers for leaving Israeli travelers in the lurch and has called on rivals to resume flights to Israel as soon as possible.
“I believe they have a commitment to the Israeli public and given the lengthy period they have stayed away from Israel, it will take a courageous and correct decision by the management teams of the airlines to resume flight immediately,” Ganancia commented.
“This situation creates a true crisis among Israeli consumers who ordered tickets from these companies and, in many cases, are left in the lurch and contact El Al at the last minute,” Ganancia added.
El Al, which means ‘Upwards’ or ‘To the Skies’ in Hebrew, faced potential catastrophe during the COVID-19 pandemic when travel restrictions pummeled the airline’s finances.
In a controversial deal, a controlling stake in the airline was acquired by a company led by the 27-year-old son of an Israeli businessman who made his fortune with a chain of nursing homes in the United States.
In recent years, El Al had struggled to attract price-conscious travelers who had ignored the airline’s patriotic marketing campaigns in favor of low-cost carriers that had barreled into Tel Aviv to meet surging demand.
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