Gaza Fighting Pushed El Al Into $26.6m Loss

Yoram Gabison
Yoram Gabison
Yoram Gabison
Yoram Gabison

El Al Israel Airlines lost $26.5 million for the last quarter of 2012 − more than three times the $7.8 million it lost the same time the previous year − after Israel’s brief November operation in Gaza deterred travel.

The loss would have been even greater were it not for tax gains of $8.6 million, compared with a tax liability of $12 million the year before.

Nevertheless, the airline’s shares rose 0.4% in Tel Aviv Stock Exchange trading to 53 agorot.

Israel’s flagship carrier reported revenues of $464 million for the quarter, down 4% from the the same time in 2011. Most of the decline was due to a 3.3% drop in passenger numbers during Operation Pillar of Defense in the Gaza Strip in November. But some of the decline came from lower revenue per passenger-kilometer due to fierce competition.

In addition, El Al said cargo revenues dropped 7% from a year earlier.

Gross profit for the quarter declined 43% to $47 million, or 10.2% of revenue, narrowing from 17.1% the same time in 2011. Most of the decline resulted from the drop in passenger and cargo revenues, as well as a 7.8% rise in fuel costs.

Adding in a loss from the sale of equipment, the carrier was left with an operating loss of $29 million, compared with an operating profit of $8 million a year earlier.

The carrier said that some of the revenue and gross profit losses were offset by a 9% reduction in cost of sales to $50 million, or 10.2% of turnover. El Al reduced its workforce by 135 people last year, or 2.2%, to 5,920.