El Al Israel Airlines Ltd. (TASE: ELAL) today published its results for the first quarter of the year. Revenue declined from $419.8 million in the first quarter of 2015 to $396.5 million in the first quarter of 2016. The company explained that the first quarter this year did not include the Passover holiday, which will have a positive effect on its second quarter results, and was also affected by the winter season, regarded as a slow time for the company. El Al's net loss grew from $16 million in the first quarter of last year to $21.4 million in the first quarter of this year.
The number of El Al's passenger grew from 957,000 in the first quarter of 2015 to 1.05 million in the first quarter of 2016, a 10% increase, while the occupancy rate for its airliners rose from 79.5% to 80%.
Despite these positive figures, the substantial drop in ticket prices resulting from competition and lower oil prices drove down El Al's revenue. Fuel prices fell 37% in the quarter, saving the company $35 million in expenses, net of hedging expenses.
With the publication of his company's reports, El Al CEO David Maimon said, "The results for the first quarter of 2016 were affected not only by the relatively weak winter season and the falling of the Passover holiday in the second quarter, but also by higher expenses caused by disruptions in manning flights. We are currently continuing our negotiations with the pilots' representatives in order to enable the company to devote all its efforts to dealing with intensifying competition in the aviation industry. At the same time, we are continuing our preparations for receiving the new Dreamliner planes and carrying out El Al's strategy by bolstering our frequent flyers' club, our special UP service, etc."
The El Al pilots committee stated in response: "Blaming the company's pilots is the usual way in which the management shirks its responsibility for running the company and for the situation. Mistaken decisions by El Al's management, chiefly in planning flights and assigning crews, ignoring the restrictions that the management itself introduced into its work agreements, contributed to the losses. A conscious decision to lease aircraft while causing harm to passengers, and the management's ignoring of many proposals for amending the unsuitable agreement, caused tens of millions of dollars in unnecessary costs and led to a decline in the company's profits."
Published by Globes [online], Israel business news - www.globes-online.com - on May 26, 2016
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