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

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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.

An El Al cargo terminal. Declines in traffic, yields, contributed to airline's losses in the quarter.Credit: Sivan Faraj

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