El Al Marks 20th Anniversary on Stock Exchange with Soaring Q2 Profits and Ambitious Expansion Plans

Israel's flagship airline, El Al, is celebrating its 20th anniversary since its listing on the stock exchange by unveiling remarkable financial performance in the second quarter of 2023. The company's published reports reveal a substantial surge in profits and a strategic business roadmap geared towards fleet expansion and upgrading narrow-body aircraft.

The reports underscore a momentous operating profit of $90 million for Q2 2023, a striking contrast to the $9 million achieved in the corresponding quarter of 2022. Equally impressive, the airline managed a pre-tax profit of approximately $59 million, a significant turnaround from the pre-tax loss of roughly $17 million experienced previously. Notably, this achievement was realized with a production capacity of just 87%.

Throughout the pandemic period, El Al had executed efficiency measures to navigate the challenging market conditions. However, the company has now outlined an ambitious business blueprint built upon four key principles: attaining sustainable profitability and financial stability, fortifying the capital structure to achieve positive equity, safeguarding operational efficiency, and bolstering cash reserves to drive growth and development.

El Al's strategic plan is highlighted by several pivotal initiatives. The airline plans to reactivate most of its planes currently in storage by the end of 2024, primarily Boeing 777 aircraft that were grounded due to the pandemic. Additionally, El Al has initiated a "retrofit" process for some of its Boeing 777 planes, aiming to configure their interiors to match the layout of Dreamliner aircraft. This alteration will lead to an increased seating capacity and production output.

The first retrofitted aircraft in this series has already commenced flights this month. The phased conversion is expected to encompass three more aircraft by the close of 2024, incurring an estimated cost of $50 million. This strategic maneuver aligns with the airline's plan to operate these revamped aircraft mainly on long-haul routes, particularly those to North America and distant destinations.

In a significant move to enhance its fleet, El Al took delivery of its 16th Dreamliner aircraft in July 2023, facilitated by a financing agreement. The airline is set to receive an additional Dreamliner in Q2 2024, followed by two Boeing 787-9 aircraft in 2025 and 2026, thanks to an extended option with a foreign lessor. This progression will culminate in the incorporation of three more Boeing 787 Dreamliners between 2024 and 2026.

Moreover, El Al has embarked on a comprehensive campaign to evaluate the renewal of its narrow-body aircraft fleet. The airline has solicited proposals from aircraft and engine manufacturers, including Airbus, which is hopeful that El Al will express interest in its cutting-edge Airbus A321XLR, a long-range narrow-body aircraft.

The company's endeavors also extend to expanding its flight routes. In the fourth quarter of 2023, El Al intends to introduce a new route to Delhi, India, and renew its flights to Mumbai. Notably, the recent approval for Israeli airlines to traverse Saudi Arabian airspace has significantly reduced flight times to India, making it feasible for the carrier to employ more cost-effective narrow-body aircraft on these routes.

Dina Ben-Tal Gnansia, CEO of El Al, expressed her satisfaction with the company's achievements. "Following a promising first quarter, we are thrilled to present record-breaking results for the second quarter, marking one of our most successful quarters since our IPO. Our revenue stabilization, combined with a steadfast commitment to efficiency measures adopted during the pandemic, positions us on a solid trajectory towards financial stability," she stated confidently.

As of now, El Al operates flights to 59 destinations, including seasonal routes, underscoring the airline's commitment to continuously expanding its global presence and maintaining its position as a key player in the aviation industry.