El Al Israel Airlines Ltd. (TASE: ELAL) has today reported its results for the fourth quarter and full year of 2018. The carrier blamed increased competition, higher fuel and salary costs and the strengthening of the shekel for pushing it to a loss in 2018.
El Al reported a pre-tax loss of $41 million in the fourth quarter of 2018 compared with $38 million in the fourth quarter of 2017. In 2018, El Al reported a pre-tax loss of $68 million compared with a $9 million profit in 2017 although revenue rose 2% over the year. Revenue in the fourth quarter was $493 million, down 3.7% from $512 million in the corresponding quarter of 2017.
El Al CEO Gonen Usishkin said, "Following implementation of the Open Skies policy, competition at Ben Gurion airport increased in 2018 with an emphasis on European and Far Eastern airlines. The Ben Gurion airport market grew from 20.2 million passengers to 22.3 million passengers. Especially prominent was the government's decision to allow Air India to fly over Saudi Arabia on a shorter route while El Al was not allowed to fly this route and this significantly eroded profitability on this route."
He added, "Despite the competition, the company maintained its 84% occupancy rate and increased revenue from passengers by $54 million."
Usishkin also mentioned a 30% increase in fuel prices and said that El Al has enormous potential when the fleet of Boeing 747s is replaced by its fleet of Dreamliner Boeing 767s.
Published by Globes, Israel business news - en.globes.co.il - on March 13, 2019
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