El Al sinks to loss due to higher fuel costs

El Al CEO Gonen Usishkin Photo: Sivan Faraj

El Al's market share of passengers to and from Ben Gurion airport shrank to 26.7% in the second quarter of from 29.5% in the corresponding quarter of 2017.

The deterioration in El Al Israel Airlines Ltd.'s (TASE: ELAL) operations was reflected in the carrier's second quarter results, which it announced this morning. The Israeli airline reported a $18 million net loss in the second quarter compared with a net profit of more than $16 million in the corresponding quarter of 2017.

El Al has been reporting worsening results for some time. In the first half of 2018, the airline reported a net loss of $62 million compared with a net loss of $14 million in the first half of 2017.

El Al's revenue in the second quarter of 2018 edged up 1% to $546 million but operating expenses jumped significantly and gross profit fell 36% to $69 million. Operating loss in the second quarter was $14 million.

El Al's share price has fallen 40% since the start of 2018, giving a market cap of NIS 430 million.

The airline has also seen its market share of passengers to and from Ben Gurion airport shrink to 26.7% in the second quarter of from 29.5% in the corresponding quarter of 2017. Occupancy on flights was 83.5% in the second quarter, down from 84.3% in the corresponding quarter of last year.

El Al CEO Gonen Usishkin said, "In the second quarter of 2018, El Al recorded an increase in revenue compared with the corresponding quarter of last year. This is alongside coping with challenges and changes in the aviation sector, the continued rising trend of competition from foreign airlines, and in particular from low-cost carriers. In the second quarter, the company coped with a sharp rise in the price of fuel and this was the main reason for the loss."

Published by Globes [online], Israel business news - www.globes-online.com - on August 15, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

El Al CEO Gonen Usishkin Photo: Sivan Faraj
El Al CEO Gonen Usishkin Photo: Sivan Faraj
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