EL AL profits surge despite ongoing conflict

EL AL Israel Airlines has posted strong results for the first financial period of the year, despite the ongoing conflict in the Middle East. It posted a net profit of $80.5 million, swinging from a loss of $34.4 million a year prior. The strong profits were driven by the lower expenses, which were at $20.4 million, down from $33.8 million in first quarter 2023. Furthermore, its revenues were at $738 million, up from $500 million in the same period last year. Its revenues were also up 9% from $678 million in last year's fourth quarter in which conflict broke out in Israel. EL AL said the growth over the fourth quarter was driven by its improved load factor, expanded seat capacity, along with increasing cargo activity. Its passenger load factor grew to 93%, up considerably from 85% in first quarter 2023, along with its available seat kilometres (ASKs) up 11% year-on-year (YoY) to 6.3bn. Cargo revenue in the quarter was at $75.7 million, remaining flat from fourth quarter's $75.8 million. In both periods, the airline reported a strong demand for cargo activity compared to normal due to ""the continued demand for cargo flights in wartime."" The airline added: ""EL AL expanded its cargo activity, whether in the belly of passenger flights or on special cargo planes, while continuing to fly essential supplies to Israel to help the security and rescue forces."" The airline read in its report: ""The current security situation requires EL AL to continue its operations, even now, in war format, and all that entails, including making required commercial and operational adjustments. The adjustments are ongoing in order to continue to keep the skyway to and from Israel open"". EL AL said the adjustments being made are to facilitate business activity, along with ensuring connection for the country's communities. On X, formerly Twitter, the airline said it would ""continue to be Israel's gateway to the world"" despite the heightening geopolitical tensions. With airlines cancelling operations in the country as conflicts continued to heighten, EL AL saw greater demand from its native passengers. ""We are working fervently to increase seat capacity, while fully utilising the company’s operational ability, and attempting to provide as adequate a response as possible to the strong pressure and unusual demand for our flights as well as on EL AL's customer service network, along with creating specific solutions in special cases,"" said EL AL CEO Dina Ben Tal Ganancia. She said that the airline is seeing strong demand and ""unusual load"" on its service network. She added: ""Some of our people are still performing military reserve duty and the company is working in our war format."" Amid rising tensions, Ganancia called on ""foreign airlines to resume their flights to Israel and restore stability to the regional aviation market."" Its EBITDAR results were at $196 million, up significantly from $60 million YoY. Cash flow from operating activities were at $375.7 million, up from $68.8 million YoY, with its cash balance at the end of first quarter 2024 at $738.2 million. Operating income was also up significantly from $8 million last year up to $120 million. The airline said the impact of the conflict seeing increased demand on its services, is expected to continue through the second quarter. To combat the strain on capacity, it had made an agreement earlier in May to wet lease two 737-800 aircraft from KlasJet, a subsidiary of Avia Solutions. In addition, it had purchased three 787 Dreamliner aircraft with options for an additional six from Boeing.