El Al Israel Airlines posted a $106.5 million net profit for 2015, reversing a 2014 net loss of $28 million as passenger numbers increased 7.6% over the year.
In 2014, El Al saw its profits tumble by over $55 million year-over-year (YOY) following disruptions caused by Israel’s military operations against Palestinian forces in Gaza that summer. Inbound tourism to the region dropped 20% in the latter half of 2014.
During 2015, the Israeli flag carrier transported 4.9 million passengers, up from 4.6 million passengers in 2014. Traffic grew 4% YOY to 19.74 billion RPKs and capacity increased 3.7% YOY to 23.88 billion ASKs, producing a passenger load factor of 82.6%, up 0.1 point YOY. El Al’s cargo traffic for the year was 488.7 million RTKs, up 0.9% YOY.
For the full-year, the number of Israelis heading abroad rose 15.2% YOY to 5.4 million; the number of tourists arriving in Israel during the year was down 0.8% YOY to 2.5 million.
“Thanks to … a dramatic improvement of operational efficiency due to the drop in fuel prices, the entry of new aircraft [and] modular pricing for UP-branded flights which increased demand … we present[ed] record results,” El Al CEO David Maimon said. UP is the low-cost airline operated by El Al.
Full-year revenue for the airline was $2.05 billion, down 1.3% YOY; operational expenses fell 11.6% YOY to $1.59 billion. The carrier’s operating profit for the year was $461.2 million, a 65.5% increase YOY.
El Al attributed the drop in revenue as a result of opposing trends. “On the one hand, revenues were favorably affected [by the] growth in the number of passengers at [Tel Aviv’s] Ben Gurion Airport,” the company said. “On the other hand, the company’s revenues were adversely affected as a result of the drop in flight prices … mostly due to the increased competition and the impact of the drop in fuel prices.”
Fourth-quarter revenue for the airline was $476.3 million, down 3.4% YOY; operational expenses fell 14.1% YOY to $379.1 million. Fourth-quarter operating profits came to $97.2 million, an 86.7% YOY increase. El Al’s fourth-quarter net profit was $12.2 million, reversing its $14.8 million net loss in 4Q 2014.
Following the year’s turnaround in profits, El Al management granted a company-wide bonus of “more than $9 million, in addition to the wage increase and bonuses to employees paid under the wage agreement of June 2015,” the company said. As of Dec. 31, 2015, El Al employed 3,779 permanent and 2,330 temporary employees.
El Al’s owned fleet of Boeing aircraft as of the end of the year comprised six 747-400s, eight 737-900ERs, one 737-700s, six 737-800s, six 777-200ERs and two 737-300ERs, with an average age of 12 years. El Al’s leased aircraft as of Dec. 31, 2015, comprised nine 737-800s and five 737-300ERs, costing El Al approximately $64.2 million in lease fees for the year.
On Oct. 29, 2015, EL Al signed with Boeing the largest aircraft acquisition in the airline’s history, purchasing nine 787-8 and 787-9 Dreamliners with options for 13 additional Dreamliner aircraft, valued at approximately $1.25 billion. Additionally El Al arranged to lease another six Dreamliners from several lessors, including Air Lease Corp. El Al intends to utilize the Dreamliners to replace its 747-400 fleet on its New York JFK/Newark-Israel routes, as well as replacing its 767s on its Boston-Israel and Toronto-Israel routes. The fleet renewal is to begin in the third quarter of 2017, El Al said.