El Al Airlines Achieves Record Profits and Plans Major Aircraft Purchase Amid High Tensions
El Al, Israel’s flagship airline, announced a record profit of USD 147.4 million for the second quarter of 2024. This marks the second consecutive quarter of record profits for the airline. El Al also revealed a USD 2.5 billion deal to purchase new aircraft to upgrade its fleet.
Many international airlines, including Lufthansa Group, Ryanair, and Air Europa, have suspended flights to Israel due to ongoing tensions with Iran. These cancellations have left thousands of Israelis stranded abroad but have given El Al a near-monopoly on flights. According to the Israel Airports Authority, 62% of Ben-Gurion Airport traffic during the first quarter of 2024 was with El Al.
El Al reported a 92% seat occupancy rate, a 5% increase compared to the second quarter of 2023. The airline also saw a 24% increase in ‘revenue per available seat kilometer’ (RASK) compared to the same period in 2023. During April-June, El Al generated USD 839 million in revenue, a 33% increase from the same quarter in 2023, breaking its previous record of USD 80.5 million in first-quarter profits.
The airline announced plans to purchase up to 31 Boeing 737 MAX aircraft for up to USD 2.5 billion, the largest procurement in its history. The deal includes 20 aircraft with an option for 11 more, with deliveries starting in 2028. El Al stated, ‘The landmark deal is a major milestone in the implementation of the company’s strategic plan, which modernizes its fleet of aircraft, integrates the latest technologies, and boosts seat capacity.’
The record-setting revenue is a significant turnaround from 2020 when coronavirus travel restrictions put El Al’s existence in doubt, forcing the airline to put 80% of its staff on unpaid leave. Although El Al is privately owned, the government holds a ‘golden share’ in the airline, allowing it to influence key decisions.
Doubts Revealed
El Al Airlines -: El Al is the main airline of Israel, which is a country in the Middle East. It helps people travel to and from Israel by airplane.
Record Profits -: Record profits mean that the company made more money than it ever has before. In this case, El Al made USD 147.4 million in just three months.
USD 147.4 million -: USD stands for United States Dollars, which is a type of money used in the United States. 147.4 million means 147,400,000 dollars.
Second Quarter -: The second quarter refers to the second three months of the year, which are April, May, and June.
USD 2.5 billion -: USD 2.5 billion means 2,500,000,000 dollars. This is a very large amount of money.
Aircraft Purchase -: An aircraft purchase means buying new airplanes. El Al is planning to buy new planes to help more people travel.
92% seat occupancy rate -: A 92% seat occupancy rate means that 92 out of every 100 seats on El Al’s planes were filled with passengers.
Revenue per available seat kilometer -: Revenue per available seat kilometer is a way to measure how much money the airline makes for each seat it has available for every kilometer it flies.
Tensions with Iran -: Tensions with Iran means that there are problems or conflicts between Israel and Iran, which is another country in the Middle East.
Near-monopoly -: A near-monopoly means that El Al is almost the only airline flying to and from Israel because other airlines have stopped their flights.
Boeing 737 MAX -: Boeing 737 MAX is a type of airplane made by Boeing, which is a company that builds airplanes. These planes are known for being modern and efficient.
Deliveries starting in 2028 -: Deliveries starting in 2028 means that El Al will start receiving the new airplanes they bought in the year 2028.
