El Al Doing Better, But Still in the Red

By Shimon B. Lifkin

YERUSHALAYIM – Thanks to a government bailout and a new owner, El Al Airlines has managed to survive the devastating impact of the pandemic on air travel, but Israel’s flagship carrier is still in the red.

Globes reported on Wednesday that El Al revenue jumped 146% in the first quarter of 2022 in comparison with the first quarter of 2021, to $283 million. The turnaround was attributed to increased ticket sales, mainly in March, as pandemic restrictions were eased and the demand for flights and vacations returned.

Alongside the rise in sales, however, operating expenses also rose sharply, by 77%, to reach $293 million in the quarter, mainly because of a 247% rise in expenditure on jet fuel to $83 million, as global oil prices leapt. The company therefore posted a gross loss of $10 million, which compares with a gross loss of $48 million in the corresponding quarter of 2021.

In addition, the cost of compensation rose by $46 million as furloughed employees returned to work, and sales expenses rose by $20 million, in comparison with the corresponding quarter.

El Al posted an operating loss of $45 million, which compares with a $76.5 million operating loss in the corresponding quarter, and a net loss of $66 million, which compares with a net loss of $86 million in the corresponding quarter.

The airline’s financial woes are far from over. The company continues to seek sources of finance and to reschedule past debts, and to request postponement or waivers from lenders and creditors. The deal whereby The Phoenix will lend El Al $130 million convertible into a 25% stake in El Al’s Frequent Flyer Club is expected to be finalized in the coming months, said Globes.