The rise in passenger numbers at Ben Gurion Airport in the third quarter, alongside a fall in the price of jet fuel, did not translate into an improvement in the bottom line of El Al Israel Airlines Ltd. (TASE: ELAL), which saw its profit dip, among other things because of a rise in salary costs.
El Al's share price is currently down by more than 17% on the Tel Aviv Stock Exchange.
El Al's third quarter net profit was down 36% in comparison with the third quarter of 2018, at $27 million, despite an 18% rise in the number of passengers passing through Ben Gurion Airport in the quarter. For the first nine months of 2019, El Al posted a loss of $28 million, which compares with a loss of $21 million in the corresponding period of 2018.
Operating revenue rose 1% to $647 million in the third quarter. Revenue from carrying passengers rose by $8 million (1.3%). The rise is attributed to a rise in the number of passengers per kilometer flown, partly offset by a fall in return per passenger kilometer. El Al also cites negative impact from changes in the shekel exchange rate against the US dollar.
Cargo revenue fell by $2 million, because of a decline in the quantity of cargo carried and a decline in return per kilometer/tonne, against a background of global weakness in the cargo market and tough competition.
Operating expenses grew by $1.2 million in the third quarter to $505 million. Salary costs rose by $11 million, arising from expansion of activity, with an 8% in supply of passenger seats per kilometer. Jet fuel prices per 13% lower in the third quarter of 2019 than in the corresponding quarter.
The airline's gross profit rose 3% in comparison with the corresponding quarter to $142 million.
Published by Globes, Israel business news - en.globes.co.il - on November 27, 2019
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