El Al Israel Airlines: Q3 2019 revenues up 2.5%
El Al Israel Airline’s revenues for the third quarter of 2018 amounted to approx. USD 642 million compared to approx. USD 626 million for the third quarter of 2017, indicating a growth of about 2.5%.
Operating profit for the third quarter of 2018 amounted to approx. USD 62 million compared to approx. USD 69 million for the third quarter of 2017, indicating a decrease of about 11%.
Profit before tax for the third quarter of 2018 totaled approx. USD 54 million, compared to profit before tax of approx. USD 63.8 million for the third quarter of 2017.
Net profit for the third quarter of 2018 amounted to approx. USD 42 million compared to approx. USD 49 million for the third quarter of 2017.
EBITDA for the third quarter of 2018 amounted to USD 99 million compared to USD 109 million for the third quarter of 2017.
EBITDAR for the third quarter of 2018 amounted to USD 137.7 million compared to USD 147.3 million for the third quarter of 2017.
The Company’s cash and deposit balances as of September 30, 2018 totaled approx. USD 246 million.
The number of flight segments in the third quarter of 2018 declined by approx. 0.7% compared to the third quarter of 2017; however, passenger revenue per kilometer flown (RPK) increased by approx. 1.3% and available seat per kilometer (ASK) increased by about 1.2%.
Average total income per RPK (Yield) for the third quarter of 2018 grew by about 2.1%.
Aircraft load factor for the third quarter of 2018 stood at 85.4%, similarly to the third quarter of 2017.
The Company’s revenues for the first nine months of 2018 amounted to approx. USD 1,649 million compared to USD 1,585 million for the first nine months of 2017, reflecting a growth of about 4%.
Operating loss for the first nine months of 2018 amounted to approx. USD 4 million compared to an operating profit of approx. USD 62 million for the first nine months of 2017.
Loss before tax for the first nine months of 2018 amounted to approx. USD 26 million compared to a profit before tax of USD 47 million for the first nine months of 2017.
Net loss for the first nine months of 2018 amounted to approx. USD 21 million compared to USD 35.4 million for the first nine months of 2017.
Gonen Usishkin, El Al’s CEO:
“During the third quarter of 2018, EL Al recorded a 2.5% growth in revenues compared to the third quarter of 2017, and at the same time coped with the challenges and changes presented by the aviation industry as well as the continued trend of increased competition posed by foreign airlines companies, and in particular, low cost airlines. Alongside these, the Company has dealt with the sharp increase in jet fuel prices, about 37%, which is the main reason for the increase in the Company’s expenses and of the decline in profitability.
Recently, the Company entered into a new agreement with its pilots, which is expected to ensure proper labor relations and create a positive atmosphere of cooperation between the management and pilots. This agreement provides a response to the new regulations of the Aviation Law, and will assist the Company in implementing and realizing its commercial plans. We believe that an agreement regulating our relationship with the pilots will assist moving the Company forward.
Our Dreamliner aircrafts acquisition program is being implemented as planned, in line with the schedule agreed upon. So far, we received seven aircrafts, the last of which, was delivered at the end of October and, in 2019, we expect to receive seven more Dreamliners. The demand for seats on the Dreamliners is high and customer satisfaction meets the Company’s expectations.
We continue accelerating the process of optimizing and upgrading all of our wide-body aircrafts. To improve customer service and increase efficiency, we have expedited the removal of the entire 767 aircraft fleet from service, so its operation will end by the end of January 2019.
In line with the Company’s announcement, in October we launched flights to European destinations under the new sales model established by the Company. This model enables passengers to choose the flight package best suited to their needs, to all European destinations of the Company, and pay for the package they chose. This model improves El Al’s ability to more efficiently compete with all players in the European market, and in particular, Low-Cost airlines.
The Company diversifies its flight schedule. Whilst it prepares to launch the new San Francisco route, which will start operating in May 2019, EL AL expands its flights destinations in Europe, so that flights to Lisbon and Nice, that were carried out by Sun d’Or ( EL AL’s subsidiary) on a seasonal basis, will be operated regularly by the Company throughout the year. In addition, the company will launch a new route to Manchester, England, starting May 2019. We will continue to optimize and improve our network of routes and will constantly examine the opening of attractive destinations for our customers.
Dganit Palti, El Al’s CFO, noted as follows:
“During the third quarter, competition in Ben-Gurion Airport continued to grow, alongside the increase recorded in the number of passengers. In light of these two trends, we succeeded in increasing the company’s revenues by 2.5% in the quarter and maintaining a high occupancy rate (Load Factor), while YIELD increased, even though the occurrence of the Jewish high holidays in this quarter reduced the Company’s operating days by more then 4%.
At the same time, the Company’s expenses increased, mainly due to the 37% increase in the price of jet fuel, which increased net expenses after hedging by approx. USD 28 million.
We concluded the third quarter of 2018 with a cash balance of approx. USD 246 million, EBITDA of approx. USD 99 million and equity in the amount of approx. USD 314 million.”