El Al Lost $26.5 Million in the Last Quarter of 2012 Due to Gaza War

Declines in passenger and cargo traffic and yields during Operation Pillar of Defense contributed to airline's grim balance sheet.

El Al Israel Airlines reported losses of $26.5 million in the fourth quarter of 2012, compared to a loss of $7.8 million in the parallel period last year.

The loss would have been even greater were it not for a tax break worth $8.6 million, compared to tax expenses of $12 million in the parallel.

The flagship carrier reported revenues of $464 million for the quarter, down 4% from the fourth quarter of 2011.

Most of the decline was due to a 3.3% drop in passenger numbers during Israel's Operation Pillar of Defense in the Gaza Strip in November.

Some of the reduced revenues were a result of a decline in yields per passenger-kilometer due to fierce competition.

Cargo revenues dropped by 7% compared to the parallel quarter as a result of market contraction and a decline in per-ton yields and in the number of ton-kilometers flown.

Gross profits for the quarter declined by 43%, to $47 million, or 10.2% of turnover, compared to 17.1% of turnover in 2011. Most of the decline resulted from the drop in passenger and cargo revenues, as well as a 7.8% rise in aviation fuel costs.

El Al reported operating losses of $29 million in the last quarter of 2012, compared to operating profits of $8 million in the parallel in 2011, as a result of the drop in gross profits and capital losses incurred by the sale of fixed assets. The same period in 2011 saw capital gains of $4.9 million.

Some of the revenue and gross profit losses were offset by a 9% reduction in sales costs, to $50 million, or 10.2% of turnover.

The wage costs of Company President and CEO Eliezer Shkedy came to NIS 2 million in 2012.

Sivan Faraj