In the third quarter of 2024, EL AL revenues totaled approx. one billion dollars; EBITDAR amounted to approx. $360 million; and the net income was approx. $187 million.
“More than a year has passed since the events of October 7 and the outbreak of the “Swords of Iron” War. EL AL embraces the reservists and their families. We fervently hope for the immediate return of the hostages, and pray for the safety and well-being of the men and women serving in the IDF and the security forces.” says the airline in 3rd Q of 2024 financial results announcement.
Much like the previous quarters, and even more so given the changing and challenging security conditions, the ongoing flight cancellations by foreign airlines continue to force us to deal with
unprecedented levels of demand which far exceed supply. Despite the challenges, we are constantly working to strengthen our flight schedule as much as possible, making commercial, operational, and logistical adjustments.
In this quarter, as in previous quarters, the Company aircraft’s load factor (LF) soared to a peak of approx. 94% versus 88% in the same period last year, representing extremely high levels of demand for EL AL’s flights in the current climate, on top of regular demand rates during the summer quarter and school break. Thanks to the efforts to enhance the flight schedule and in view of the irregular demand, the available seat kilometer (ASK) increased by around 15%. EL AL’s average revenue per revenue passenger kilometer (RRPK), which reflects the average price per passenger, has risen by approx. 16% year-over-year, and even less so in economy class.
The company continues to maintain a strict pricing policy, in the context of which they set uniform prices for four main high-connectivity destinations – Larnaca, Athens, Viena and Dubai – from where hundreds of onward destinations worldwide may be reached. Tens of thousands of tickets were offered for these destinations, and the high demand, paired with the comfortable price, resulted in most of these flights being fully-booked in advance, blocking last-minute bookings. In other destinations, EL AL determined a price cap for economy class, to ensure fair prices also when booking the last available seats. The price caps also apply during peak seasons and are valid in the coming months.
EL AL updates its lenient cancellation and modification policy from time to time according to security events, to allow passengers flexibility and a possibility to cancel their ticket and receive a full value voucher for future use or make changes with no change fees. In addition, EL AL extended the vouchers issued during the War by an additional year and continues to grant benefits to IDF soldiers and reservists, and assist men and women called up for reserve duty to return to Israel for their service. The company also continues to support the war effort, among other things, through donations to various associations and by operating rescue flights from Amsterdam, amounting to millions of shekels.
EL AL CEO Dina Ben Tal Ganancia (Photo: Guy Kushi and Yariv Fine).
According to EL AL CEO, Dina Ben Tal Ganancia: “Throughout the months of the War, and especially during the current quarter, we continue to experience increased demand for EL AL flights at levels significantly exceeding the company’s seat capacity. We are constantly striving to enhance the seat offering as much as possible, find solutions and best serve the passengers seeking to fly into and out of Israel. We continue to maintain a strict pricing policy and actively work to limit ticket prices through the setting of price caps for passengers booking return flights to all EL AL destinations, in addition to the four destinations for which we defined set prices – Larnaca, Athens, Dubai and Viena. We have consequently gained insight that setting fixed prices, coupled with flexibility in ticket cancellation, provides the consumer with availability and comfort for advance booking, but at the same time, fills-up flights long in advance, which restricts us from optimally managing seat offering.”
Since the onset of the war, EL AL has been able to take on national assignments whenever needed thanks to all of our staff relentlessly working around the clock to fulfil our mission. Just two weeks ago, we received yet another reminder of the importance of the resilience of Israeli airlines, after we returned to Israel approx. 2,000 Israeli passengers who experienced antisemitic hostility in Amsterdam. EL AL stepped up, and operated 6 rescue flights on Saturday, at its own expense, and with no additional costs for the passengers.
EL AL has been operating in emergency mode for over a year, aiming to keep Israel’s sky open to the world, which is crucial for Israel’s continued business, economic and diplomatic activity. Aviation is a key lifeline for Israel, and so long as foreign airlines will not renew their operations in Israel, the market continues to face challenges, and consumer demand will not stabilize. We continue to advance our strategic plan, focusing our route network on key destinations such as the USA, Thailand, London, and Paris, where we operate with daily frequencies and exceptionally high load factors. The streamlining process EL AL underwent during the COVID-19 pandemic continues to be demonstrated in the company’s responsible conduct, which builds-up its financial soundness for the coming years”.
EL AL CFO Yankele (Yaakov) Shachar
EL AL CFO Yankele (Yaakov) Shachar said: “We are concluding a quarter in which revenue exceeded the one billion dollar mark. The growth is partly due to an increase in activity volumes and a high load factor that continues to be strong this quarter as well, alongside meticulous management of the route network and maintaining the streamlining plan. In our estimation, strengthening our financial soundness, alongside continued improvement of the positive equity, while reducing the net financial debt that totaled approx. $376 million, together with a cash balance of around $1.25 billion, will support the company’s growth in the years to come”.
Financial highlights in the third quarter of 2024:
- Company revenues in the quarter totaled approx. $1,004 million, an increase of approx. 20% versus approx. $839 million in Q2. Available seat kilometer (ASK) has risen by approx. 15% year-over-year, with the continued stretching of the company’s capacity with a view to enhance the flight schedule as much as possible and enable open skies between Israel and the rest of the world. The continued build-up of production capacity following recovery from the COVID-19 pandemic and the addition of wet-leased aircraft to operate in the company’s service, enabled the significant ASK increase. Revenue per seat (RASK) increased by approx. 23% year-over-year, mainly due to a considerable and irregular increase in the load factor (LF) which soared to approx. 94% versus approx. 88% in the same quarter last year, and due to an increase in revenue per revenue passenger kilometer (RRPK), which increased by 16% year-over-year and by only 2% compared with Q2. The growth derived from irregular load factor rates and high demand for the company’s flights on the backdrop of the reduced number of flights of foreign airlines to Israel.
- EBITDAR totaled approx. $360 million in Q3/2024, compared with approx. $172 million in the same quarter last year.
- Net financing expenses in the quarter totaled approx. $24 million, compared with approx. $33 million in the same quarter last year. The decrease mainly results from an increase in interest
revenues from deposits, in view of the significant increase in the Group’s liquidity balances, and from a decline in the financial debt. - Net income in the quarter totaled approx. $187 million, versus approx. $52 in the same period last year. The increase mostly derives from an increase in the available seat kilometer (ASK), rise in the load factor (LF), increase in Revenue per seat (RASK), and from the Company’s significant post-Covid streamlining efforts, focusing of EL AL’s route network and diversion of aircraft from destinations with significantly reduced demand to high-demand destinations.
- The company’s cash flows from operating activities amounted in the quarter to approx. $320 million versus approx. $93 in the same quarter last year. The increase derives from an increase
in profitability and an improvement in the company’s working capital, mainly due to the presale of flight tickets for the demand seasons. - As of 30 September 2024, the company’s equity totaled approx. $371, versus a deficit in equity of approx. $209 million as of 31 December 2023. The increase in equity and the transition to
positive equity results from the net income recorded in the first nine months of 2024, capital raising of approx. $135 million and exercise of warrants in the sum of approx. $39. - The gross financial debt as of 30 September 2024 amounted to $1,626 million. The net financial debt as of 30 September 2024 amounted to $376 million.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
