Israir to a lost $ 15 million in Q4 2020 - 73% decrease

The closure that brought down activity on the route to Eilat, an unusual appreciation of the shekel and a hint of cleaning stables - following the acquisition of control by a group led by Rami Levy at the end of December 2020 - led the tourism and airline Israir to a loss of $ 15 million $ 400,000 in the same quarter in 2019, the last quarter before the corona crisis.
Israir's revenues, managed by Uri Sirkis, fell by 73% in the fourth quarter of 2020 compared to the corresponding quarter in 2019. The sharp decline in revenues is due to a 66% decrease in revenues from international operations in the past quarter compared to the corresponding quarter in 2019, to a level of $ 20.1 million, due to the corona crisis.
Israir's revenues from domestic operations - ie marketing tour packages and flying passengers to Eilat - fell by 77% in the fourth quarter of 2020 compared to the corresponding quarter in 2019, and amounted to $ 1.4 million, as a result of the second closure that shut down hotels in Eilat. Israir was also hit by a 96% drop in revenue from inbound tourism in the fourth quarter of 2020 to a level of $ 833,000, influenced by the corona.
The company mitigated the impact on revenues and profitability of international operations during 2020, by focusing on profitable flights - such as winning a tender for rescue flights from Frankfurt; Special flights such as flying Arab students who wanted to return to Israel; Expanding cargo flying operations from countries such as India, China, Uzbekistan, and Kazakhstan - to $ 1.1 million in the last quarter; Operating tourism destinations during the Tishrei holidays; And the opening of the route to Dubai in December 2020 following the Avraham agreements, which resulted in the flight of 60,000 passengers with an average occupancy of 62% - compared to an occupancy of 41% on El Al planes.
Israir made a gross loss of $ 800,000 in the fourth quarter of 2020 compared to a gross profit of $ 8.8 million in the corresponding quarter in 2019, due to the decrease in revenue turnover in all operating segments and due to a loss from jet fuel hedging and one-time provisions - including layoffs - In the total amount of $ 1.5 million in the last quarter, and a provision of $ 900,000 as part of the allocation of the purchase price of a road company.
The deterioration in gross profit is conditioned as a result of a reduction in operating expenses by reducing the number of employees in the company by 58%, including the removal of 200 employees per unit, the dismissal of 55 employees and a salary cut for the company's pilots.
Israir suffered an operating loss of $ 7.3 million in the fourth quarter of 2020 compared to an operating profit of $ 300,000 in the same period in 2019, compared to an operating loss of $ 123 million presented by El Al in the fourth quarter of 2020. The transition to operating loss was due to the transition to gross loss Supplied and a provision for the dismissal of employees in the total amount of $ 1.3 million, and despite a 50% cut in operating expenses by expelling employees to the IDF, dismissal of employees, salary cuts for pilots and management, return of focus areas in Eilat and some headquarters offices.
The net loss swelled in the fourth quarter of 2020 as a result of a 200% jump in net financing expenses in the last quarter compared to its counterpart in 2019 to a level of $ 4.6 million - as a result of a 6.8% appreciation of the shekel exchange rate on the dollar value of a loan of NIS 170 million , Which Israir received on state guarantee.
Israir's current operations generated a cash deficit of $ 15.6 million in the fourth quarter of 2020 compared to a cash flow surplus of $ 6.4 million at the same time in 2019. The increase in the cash flow deficit in the past quarter is due to a decrease of $ 7.5 million in the company's debt to those eligible, including a payment of $ 7 million to flight ticket buyers whose flight was canceled, and the reduction of the debt to them to only $ 1 million at the end of 2020.