Israel’s leading airline, El Al, reported an all-time high in profits for the July-to-September period, generating $1 billion in revenue. This surge was largely due to reduced competition, as many foreign airlines have suspended flights to and from Tel Aviv amidst the Gaza conflict and related threats from Iran and Hezbollah in Lebanon.
During the third quarter, El Al achieved a net profit of $187 million, marking a dramatic increase of nearly 260% compared to $52 million in the same period last year, which preceded the war that began on October 7, 2023, following a Hamas attack. Revenues rose significantly, with a 43% increase to $1 billion, compared to $696 million the previous summer. The airline also reported an impressive 94% seat occupancy rate, up from 88% the year before.
The withdrawal of major foreign airlines from the Israeli market since October 2023 has left El Al, alongside smaller Israeli airlines and a few carriers from the Gulf and Eastern Europe, dominating the skies.
Israel has consistently emphasized that its airspace remains secure, asserting that it will only close its skies if absolutely necessary.
This situation has bolstered El Al’s dominance on many routes, creating a seat shortage and driving ticket prices to extraordinary levels. Travelers have struggled to secure flights, even at inflated costs. These record-breaking profits have drawn criticism, with accusations of price-gouging and exploiting the war, charges that El Al refutes.
“El Al has been operating in emergency mode for more than a year, and our goal is to ensure that the skies remain open between Israel and the world,” stated El Al CEO Dina Ben Tal Ganancia. “Throughout the months of the war and especially in the current quarter, we continue to experience increased demand for El Al flights, which is significantly higher in relation to the seat capacity that the company is able to offer.”
“We make every operational effort to increase the supply of seats as much as possible, in order to find solutions and serve the public traveling from and to Israel, but for the moment we don’t have any substantial capacity to add additional flights and therefore everything needs to done for foreign airlines to resume their operations to Israel. Otherwise passenger demand will not stabilize and the problem will only get worse,” she added.
El Al’s Vice President for Commercial and Industry Affairs, Shlomi Zafrany, revealed to The Times of Israel that average airfare prices have risen by 16% over the past year.
“The high demand and limited seat availability as foreign airlines are not coming back for now means that most of the flight seats fill up very quickly, which makes it very difficult to buy tickets to many destinations closer to the departure time,” Ben-Tal Ganancia explained. “We continue to conduct a strict price policy and actively work to cap ticket prices, by setting a ceiling on airfares for passengers for round-trip flights to all El Al destinations.”
El Al, which operates 150 flights daily, disclosed its pricing: flights to North America range from $799 to $1,900, tickets to Eastern European destinations like Prague and Budapest cost between $158 and $637, and routes to major European hubs like London and Paris are priced between $353 and $880.
“Israelis and many business people tend to book last minute for the next week or two weeks ahead of time and then they find that there are no seats available, with long waiting lists,” said Ben Tal Ganancia. “In the current situation, customers need to book many months in advance, even one year in advance to be able to buy a ticket at the lower range of airfares.”
Amid ongoing hostilities with Hezbollah in southern Lebanon and broader regional tensions, American carriers have pulled out of Israel. United Airlines has indefinitely suspended its Tel Aviv flights, while Delta Airlines has halted service until April of next year. American Airlines has extended its suspension until at least September 2025, mirroring similar decisions by other foreign carriers.
This has left El Al as the sole provider of direct flights between Tel Aviv and North America, intensifying the scarcity of available seats and driving up costs.
“In normal times the current high demand levels for travel to New York would have pushed up airfares in economy not to a maximum $1,700 but to as much as $3,000, and this is what we are trying to avoid with the cap,” said Zafrany.
Meanwhile, smaller Israeli airlines Israir and Arkia are preparing to initiate flights to North America. However, launching such long-haul routes requires them to meet Civil Aviation Authority standards, secure US regulatory approval, and find partners for wet-leasing wide-body planes and crews, challenges they have yet to overcome.
“We welcome the efforts, but the Israeli airlines are facing a major challenge to find crews that are willing to stay overnight in Israel, which is perceived as a war zone,” said Ben Tal Ganancia. “Even if they succeed, which will be good, it will not lead to a dramatic change.”
Zafrany pointed out that the absence of American carriers has reduced seat availability on direct US routes by 50%, equating to 40 to 50 fewer flights weekly.
“Arkia and Israir will hopefully be able to operate five to six weekly flights to the US, which will help reduce the severe seat shortage but it will not solve the problem,” he concluded.
{Matzav.com}