EL AL Israel Airlines inks historic agreement for 31 737 MAX aircraft

EL AL Israel Airlines has signed a purchase agreement with Boeing for 20 737 MAX aircraft. The deal includes options for 11 additional 737 MAX aircraft to replace its current and aging 737 aircraft. The aircraft order is valued at around $1.5-$2.5bn. Deliveries are expected to begin in 2028, however Reuters reported that the carrier would consider bringing forward the operation of some of the aircraft to 2027 through a dry lease. EL AL said it is the ""largest agreement"" in its history. The airline's CEO Ben-Tal Ganancia said: ""The implementation of our strategic plan - which aims to expand the fleet, increase the value proposition for customers and increase capacity and seating - will ensure a strong and growing company for many years to come."" President and CEO of Boeing commercial airplanes Stephanie Pope said the order builds on ""seven decades of partnership"". The airline had purchased three additional 787-9 airplanes with options for six more as it expands its 787 Dreamliner fleet, valued at around $650-730 million. It expects delivery of one new 787-9 this year and two more on lease in the following years. In its second quarter 2024 results, the airline detailed its fleet expansion and renewal plans. Israel's main airport, Ben Gurion Airport, is anticipated to reach over 30 million passengers in the next few years, with the airline aiming to reach a 24% market share. In addition, post-fleet renewal, the airline expects to generate a full year free cash flow (before debt-service) of $564.6 million. It generated a $450.3 million free cash flow (before debt-service) in 2023. The results revealed that EL AL's net profits more than doubled to $147 million in the second quarter of the year, when compared to its net profit of $59 million in second quarter 2023. It reported revenues of $839 million in the second quarter of this, up from $630 million a year prior. The airline's EBITDAR was up from $163 million in second quarter 2023 to $281 million in this year's second quarter. The company has an $1.1bn in available funds. Its chief financial officer Yancale Shahar said the airline had ""successfully raised approximately $140 million through shares and options issuance"". He added: ""This capital boost, combined with our efficiency plan, has turned our company's equity positive for the first time since December 2019. Our accumulated cash reserves now position us with the strongest financial readiness since the pre-COVID era."" Capacity, measured in available seat kilometres (ASK), was up 8%. Its revenue per available seat kilometre (RASK) was up 24% in the second quarter, compared to the same period a year prior. Load factor was up approximately six percentage points to around 92%. Despite geopolitical conflicts, the airline has seen stronger summer bookings. From June 24, 2024, through to August 24, 2024, it reported net sales of $826 million, versus $637 million in the same period last year. In July, the airline had carried 658,000 passengers across 3,500 flights. The airline has benefitted from less competition from foreign airlines in the country as the conflict continues.