El Al Losses Top Worst Predictions

El Al Israel Airlines lost $83 million in the first half of 2001, even more than the $70 million loss the airline had been predicting.

According to the airline's second-quarter financial report, which was approved by the board of directors yesterday, El Al's loss for the second quarter totaled $35 million excluding its subsidiaries, also more than the $20 million loss that had been forecast for the quarter.

But despite the high first-half losses, El Al's management expects the airline to finish the year with losses of only $105 million, down from $109.4 million in 2000.

The poor second-quarter results stemmed mainly from the drastic reduction in incoming international passengers due to the security situation. El Al reported a drop of 21 percent in passenger traffic in the January-June period compared to the same period in 2000. The company flew 1.239 million passengers in the first half of 2001, representing about 35 percent of all international traffic at Ben-Gurion International Airport during that period.

The shrinking of the passenger pie has led to increased competition between El Al and foreign carriers, with price wars on the routes to Europe and the United States in particular.