El Al airlines Cleared to Resume Dividend Distribution a Year Ahead of Schedule

 Israeli national airline El Al announced Monday that the state has officially lifted restrictions on dividend distribution, allowing the company to resume payouts to shareholders on profits from 2025, a year earlier than originally agreed.

The decision reverses a condition placed on El Al during the COVID-19 pandemic when the government provided financial aid as the airline struggled with grounded flights and closed skies. The last time El Al paid a dividend was in 2017 when it distributed NIS 36 million to shareholders.

Security Cost-Sharing Deal Helped Unlock Concessions

Although no dividend has yet been declared, El Al said an agreement with the government now allows it to distribute up to 30% of net profit from 2025. From 2026 through 2028, the cap will rise to 40% of annual net profit.

The breakthrough follows El Al's recent agreement to gradually increase its contribution to aircraft security costs, previously funded primarily by the state. Under the new terms, El Al will cover 7.5% of the costs, estimated at $5–$10 million annually, with the increase phased in over six years, until 2031.

U.S. Tariffs and Boeing Deal Also in Play

In exchange, the airline requested relief from other financial restrictions, including the dividend prohibition.

The company’s push to resume dividend payments comes amid record profits, fueled by the ongoing war in the region. El Al closed 2024 with a net profit of $554 million, nearly 5 times higher than the previous year. Revenues jumped 37% to $3.4 billion, boosted by a 14% rise in average ticket prices.

 Profits Fuel El Al’s Push to Reward Shareholders

Separately, the Israeli government is reportedly seeking to reduce the Trump-era 17% tariff on Israeli imports to 10%, ahead of a 90-day freeze expiration. As part of that effort, U.S. officials are exploring the possibility of expediting the delivery of new Boeing aircraft to El Al.

El Al CEO Dina Ben Tal Ganancia has already held preliminary talks with U.S. representatives on the issue. In June 2024, El Al finalized a multi-billion dollar deal to purchase and lease aircraft from Boeing, beating out Airbus. Deliveries are set to begin in 2026 and extend over several years.