EL AL announces Q1 2018 results

El Al (TASE: ELAL) has reported an 11% increase in revenues to USD 464 million in the first quarter of 2018; a 2.5% increase in the number of passengers; an increase in load factor to approx. 83.8%; and a 4.3% increase in yield, the company said.

Alongside this, the company recorded an increase of 15% in operating expenses, attributable primarily to the growth in operations; an increase in fuel expenses totaling approx. USD 23 million, mainly due to the increase in fuel price; an increase of approx. USD 7 million in payroll expenses following the erosion of the US dollar against the New Israeli Shekel; and an increase in minimum wage.

Due to the complex reality faced by the Israeli aviation industry, particularly vis-à-vis low cost carriers, and in view of the challenges awaiting the company in the near future, including intensifying competition and increase in fuel prices, EL AL management has resolved to take a number of measures to adjust its activities to these challenges:

Deepening the implementation of a business efficiency plan across the company, including reducing expenses and increasing revenues.

Changing the compensation model for agents in Israel and abroad — The company adapts the trend prevailing among most of the world´s airlines, by changing the compensation model between airlines and travel agents, and will move to a new model in which no base commission will be paid to agents, which currently stands at 5% in Israel and a variable percentage in countries where it operates, as of June 1st 2019.

As part of the company´s decision to accelerate the optimization process of all wide-body aircraft and in order to enhance customer service and becoming more efficient with the renewal of the Dreamliner fleet, the company is currently engaged in scheduling the early removal 767 fleet from service by the end of 2018 instead of 2020.

El Al Israel Airlines Ltd. is the National Air Carrier of Israel. In 2017, El Al recorded revenues amounting to nearly USD 2.1 billion. El Al carries about 5.6 million passengers a year. The company operates flights to about 34 direct destinations around the world and many other destinations by means of cooperation agreements with other airlines, thus it currently operates 44 aircrafts, of which 27 are owned by the company.