EL AL, the national airline of Israel, continues to fulfill its projections as revenues increased by a record 27 percent in the third quarter of 2007, totaling approximately $567 million. This compares to $447 million in the same quarter last year.
EL AL’s net profit rose to $41.2 million this quarter, compared to a net profit of $1.4 million in the third quarter of 2006. Cash flow from operating activities totaled $74.1 million.
Operating expenses for this quarter totaled approximately $415 million, which is mainly attributed to the rise in fuel costs ($6 million), and the devaluation of the dollar, which added $12 million to the company’s expenses.
This quarter, hedging activity by EL AL saved $5.1 million in fuel costs. Operational profits reached $63.8 million, compared to $8.5 million last year in the third quarter. As of September 30, 2007, the cash balance for the company was $265.4 million.
The dramatic increase in the third quarter net profit is partially due to the enormous growth in passenger traffic during this period. As a result, EL AL offered 4% more seats to Israel and the load factor rose to more than 87%. Other contributing factors to the quarter’s outstanding profit are the meticulous care the airline has devoted to improving EL AL services and the overall product, an increase in revenue from cargo and leasing aircraft, as well as the providing of high quality EL AL maintenance services to other airlines.
“EL AL continues to realize its vision of leading the aviation market in Israel and being the first and preferred choice for all air traffic to and from Israel,” stated Professor Israel “Izzy” Borovich, Chairman, EL AL Israel Airlines. “I believe that the economic strength of EL AL will continue, enabling us to further lead the company to fulfill its vision.”
EL AL President Haim Romano said, “In the third quarter, we achieved our goals by increasing revenues, reducing expenses and properly managing the company’s assets. The end result is a profitable company with a sound financial base, providing attentive, quality service that benefit its customers, employees and stockholders, while continuing with its program of investments.”
“These outstanding financial results were achieved while EL AL began offering new innovative services and a more efficient operation here in the USA,” said Offer Gat, CEO, North & Central America, EL AL Israel Airlines. “Premium class passengers are now relaxing in the new, luxurious EL AL King David First and Platinum Business Class Lounges at JFK which opened in the third quarter (this past September), and which feature state-of-the-art amenities such as flat screen televisions, a high-tech business center and a shower facility. And, our new EL AL reservations call center began operating in the third quarter which provides USA based passengers with quicker service so that booking a flight to Israel is easier than ever.”
EL AL is continually working to maintain the company’s position as a leader in the aviation field. More than $250 million has been invested in two new Boeing state-of-the-art 777 aircraft which EL AL accepted in this quarter and are utilized on the nonstop USA/Israel route. The aircraft are equipped with flat bed seats in premium classes and roomier, more comfortable seats in economy. There is a personal digital entertainment system at every seat on both aircraft.
An additional $20 million is currently being spent on installing flat bed seats in First and Platinum Business Classes on all existing 777 and 747-400 aircraft in the EL AL fleet (utilized on the USA/Israel route). EL AL is at the peak of its renewal momentum and the company has continued its economization program, adding frequencies to destinations with greater demand and cutting inefficient and unprofitable routes.