El Al Embarks on Record Aircraft Purchase After Achieving Dominance in Israel’s Skies

By Aryeh Stern

An El Al Boeing 787 Dreamliner at Ben Gurion International Airport. (Flash90)

After achieving a virtual monopoly on many routes to and from Israel, raising fares, and reporting record profits, El Al is set to spend $2-2.5 billion on new aircraft. Earlier this year, El Al signed a deal to acquire three Boeing Dreamliners.

Controlled by businessman Kenny Rozenberg and managed by CEO Dina Ben Tal Ganancia, El Al announced it is moving forward with a historic purchase and lease deal for 30 Boeing 737 MAX aircraft. This represents the largest aircraft purchase in Israel’s history. The board of directors has approved exclusive talks with Boeing and aircraft leasing companies to finalize the deal.

The new Boeing 737 MAX aircraft will gradually replace El Al’s existing Boeing 737 fleet, expanding the carrier’s narrow-bodied passenger jet capacity. Deliveries are scheduled to begin in 2027. El Al expects to conclude negotiations and sign a preliminary offer document with Boeing in the coming weeks while also beginning talks with leasing companies.

El Al emphasized that there is no certainty a binding agreement will be signed or that the transactions with Boeing or leasing companies will be completed. To finance the deal, El Al raised capital earlier this year.

El Al’s first-quarter 2024 financial results, published two weeks ago, revealed how the war has positively impacted the airline’s business. With most foreign airlines halting flights to Israel, El Al’s revenues soared. Typically the weakest period for airlines, the winter season of the first quarter saw El Al achieve its best-ever results, with revenues of $738 million, a 47% increase from the first quarter of 2023, and surpassing last summer’s revenues.

With its dominant position, controlling 62% of passenger traffic at Ben Gurion Airport, El Al reported a net profit of $80.5 million in the first quarter of 2024. This compares with a net loss of $34.4 million in the first quarter of 2023 and a net profit of $40 million in the fourth quarter of 2023. The substantial profit has significantly reduced El Al’s equity deficit, now standing at $91 million.

El Al’s market capitalization is currently NIS 1.77 billion, with the company’s share price rising 25% since the start of the year.

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