El Al Israel Airlines' (TASE: ELAL) revenue jumped 146% in the first quarter of 2022 in comparison with the first quarter of 2021, to $283 million. The sharp rise came mainly in March, when sales were higher than they were in March 2019, pre-pandemic, as demand for flights and vacations surged.
Alongside the rise in sales, however, operating expenses also rose sharply, by 77%, to reach $293 million in the quarter, mainly because of a 247% rise in expenditure on jet fuel to $83 million, as global oil prices leapt. The company therefore posted a gross loss of $10 million, which compares with a gross loss of $48 million in the corresponding quarter of 2021.
The compensation expense rose by $46 million as furloughed employees returned to work, and sales expenses rose by $20 million, in comparison with the corresponding quarter.
El Al posted an operating loss of $45 million, which compares with a $76.5 million operating loss in the corresponding quarter, and a net loss of $66 million, which compares with a net loss of $86 million in the corresponding quarter.
Besides the rising price of jet fuel, El Al is also having to cope with a dispute with its pilots, which recently led to a number of flight cancellations.
El Al had positive cash flow from regular activity of $22 million in the first quarter of this year, which compares with negative cash flow of $54 million in the corresponding quarter. Its auditors continue to append a going concern qualification to its financial statements.
El Al's market share at Ben Gurion Airport was 22.3% in the first quarter.
El Al also supplied sales figures for the current quarter. Sales in April were $177 million (94% of the figure for April 2019), and sales so far in May are $267 million (10% more than in the equivalent period in 2019).
El Al nevertheless continues to seek sources of finance and to reschedule past debts, and to request postponement or waivers from lenders and creditors. The deal whereby The Phoenix will lend El Al $130 million convertible into a 25% stake in El Al's Frequent Flyer Club should close in the coming months.
During the first quarter, El Al's controlling shareholder Kanfei Nesharim Aviation, owned by Kenny Rozenberg, injected $20 million into El Al as an owner's loan, and the State of Israel injected $38 million against a bond issue. The state also paid $20 million as an advance on El Al's expense in providing security services to Israeli airlines.
At the end of the first quarter, El Al had a deficit on shareholders' equity of $590 million (up $60 million) and its current liabilities totaled $2.17 billion, $233 million more than at the end of the first quarter last year. The growth in liabilities stems from advance ticket sales, a rise in balances owed to suppliers, and the owner's loan).
Published by Globes, Israel business news - en.globes.co.il - on May 18, 2022.
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