Israel’s El Al third quarter profit down 15 percent on higher fuel costs

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El Al Israel Airlines <ELAL.TA> said on Wednesday its net profit fell 15 percent despite a rise in revenue, weighed down by higher jet fuel costs.

The company’s net profit fell to $42 million in the quarter, from $49 million a year earlier.

Revenue edged up 2.5 percent to $642 million, although operating expenses rose 7 percent, largely because of a 37 percent increase in the price of jet fuel.

Israel‘s flag carrier has met with stiff competition from rivals including Turkish Airlines, Aeroflot <AFLT.MM>, easyJet <EZJ.L> and WizzAir <WIZZ.L>, which offer lower fares on routes to Israel even though some flights require a stopover.

El Al said its passenger load factor, which measures, capacity utilisation, was unchanged at 85.4 percent.

Chief Executive Gonen Usishkin said the airline continues to face the challenge of increased competition from foreign airlines, especially low cost carriers.

He noted that El Al recently signed a new labour agreement with its pilots that will help the company moving forward.

El Al is banking on a more than $1 billon overhaul of its long-range fleet to win back customers while also revamping its short-haul fare structure.

It has received seven of 16 Boeing <BA.N> 787 aircraft that will be delivered by 2020 and another seven will arrive in 2019. El Al is accelerating its fleet optimisation plan and will remove all older Boeing 767 aircraft from service by the end of January.

TEL AVIV (Reuters)

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