El Al Turns in Record Profits for Q4 on Falling Fuel Costs

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An El Al plane on the tarmac at Tel Aviv's Ben-Gurion International Airport.
An El Al plane on the tarmac at Tel Aviv's Ben-Gurion International Airport.Credit: Daniel Bar-On

El Al Israel Airlines swung to a net profit in the fourth quarter of 2015, driven by a sharp drop in fuel costs.

Israel’s flag carrier said it earned $12.2 million in the quarter, compared to a $14.8-million loss a year earlier. Revenue dipped 3.4% to $476.3 million. Expenses declined 14.1%, as the cost of jet fuel in 2015 dropped 32%. The company said it would pay a dividend of $15 million, after paying $25 million a few months ago.

El Al said it flew more than five million passengers last year, up 8% from 2014. Its load factor was steady at 82% to 83%. In October, El Al signed a deal to buy and lease 15 Boeing 787-8 and 787-9 Dreamliner passenger planes, in a deal worth more than $2.2 billion. It was El Al’s largest-ever aircraft deal. El Al expects the new planes to reduce operating costs by 20%.

During the fourth quarter and into 2016, El Al was hit by intermittent labor action by some its pilots. The airline has since signed a new wage agreement with all its workers after the previous one expired three years ago.

Despite the swing to profitability, the company’s shares closed down 1.7% Wednesday, to 2.93 shekels ($0.76).

With additional reporting by TheMarker.

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