Tag Archives: El Al

ALC announces the lease placement of two new Boeing 787-9 Dreamliners with El Al

Air Lease Corporation (ALC) (Los Angeles) has announced an agreement to lease two new Boeing 787-9 Dreamliner aircraft to El Al Israel Airlines (Tel Aviv). Both aircraft are on long-term lease from ALC’s order book with Boeing and are scheduled to be delivered to Israel’s flag carrier airline in the third quarter and early fourth quarter of 2017. These new Boeing 787-9 Dreamliner aircraft will replace older Boeing 747-400s in El Al’s fleet and will be the first two 787s for the airline.

Image: Boeing.

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El Al to order and lease up to 15 Boeing 787 Dreamliners

El Al Israel Airlines (Tel Aviv) intends to become a new Boeing 787 operator.

El Al logo (LRW)

Boeing has issued this statement:

Boeing logo (medium)

Boeing is pleased that El Al Israel Airlines has announced its intent to purchase and lease up to 15 787 Dreamliners, with purchase rights for 13 additional airplanes. When finalized, the order will be posted to the Boeing Orders & Deliveries website.

Copyright Photo: Brandon Farris/AirlinersGallery.com.

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Boeing delivers the 50th airplane to El Al Israel Airlines

El Al Israel Airlines (Tel Aviv) and Boeing (Chicago, Seattle and Charleston) today (March 12) celebrated a major milestone  with the delivery of the airline’s 50th airplane purchased from Boeing – a Next-Generation 737-900 ER.

Boeing 737-958 ER 4X-EHD (msn 41555) was officially handed over yesterday (March 11).

The delivery is the fifth 737-900 ER for the airline following an order placed for eight between 2011 and 2013. Since taking delivery in 1961 of its first new Boeing airplane, a 707-420, EL AL’s fleet has expanded to include an all-Boeing fleet consisting of 21 737s, seven 747s, six 767s and six 777s.

Copyright Photo: Ton Jochems/AirlinersGallery.com. The first, Boeing 737-958 ER 4X-EHA (msn 41552), is seen at Amsterdam.

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El Al to start nonstop Boston flights on June 28

El Al Israel Airlines (Tel Aviv) will introduce nonstop Tel Aviv – Boston service on June 28. The route will be operated three days a week with Boeing 767-300 ER aircraft.

Copyright Photo: Paul Denton/AirlinersGallery.com. Boeing 767-3Q8 ER 4X-EAK (msn 27600) departs from Geneva.

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American Airlines and El Al expand their codeshare relationship

American Airlines (Dallas/Fort Worth) is expanding its codeshare relationship with El Al Israel Airlines (Tel Aviv). According to Airline Route, American on December 18 added its AA code on the following El Al European routes:

Tel Aviv – Amsterdam
Tel Aviv – Barcelona
Tel Aviv – Frankfurt
Tel Aviv – London (Heathrow)
Tel Aviv – Milan (Malpensa)
Tel Aviv – Munich
Tel Aviv – Paris (CDG)
Tel Aviv – Rome (Fiumicino)

Copyright Photo: Ton Jochems/AirlinersGallery.com. Boeing 737-958 ER WL 4X-EHA (msn 41552) of El Al taxies at Amsterdam.

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El Al’s third quarter net profit slips to only $10.1 million

El Al Israel Airlines (Tel Aviv) reported a third quarter net profit of $10.1 million, down from a net profit of $57.9 million in the same quarter a year ago. Net loss during the period of the first nine months of 2014 amounted to $13.2 million compared to a profit of $29.1 million dollars during the equivalent period in the previous year.

El Al’s CEO, David Maimon: “The results of the third quarter reflect the effect of the “Operation Protective Edge”, which caused significant harm to revenues and as a result El Al requested government assistance. This is the first time since the Second Lebanon War in 2006 in which El Al presents a significant decline in third quarter profits which is traditionally considered as its strongest quarter. In addition, the quarter was characterized by an erosion in prices which resulted in a decline in revenues per passenger.”

Maimon added: “On the other hand, we have significant marketing achievements: the number of members of the Frequent Flyers Club in Israel and globally increased to 1.4 million members, inter alia thanks to the launching of the Flycard and Flycard Premium credit cards with 40 thousand customers ordering these cards within a few weeks. In addition, in the framework of the renewal and extension of the Company’s network of destinations, in the fourth quarter we announced the opening of a new El Al direct line to Boston and a new cooperative agreement (codeshare) signed with JetBlue Airways and American Airlines, which enables our customers to fly to a wide range of destinations in the US with high availability and convenient connections.”

The results of the third quarter of 2014:

Revenues amounted to $601.2 million dollars, compared to $643.3 million during the equivalent quarter in the previous year, a decline of 6.5%. Revenues per passenger declined by 7.3%, mainly as a result of a drop in the yield per passenger-kms, as a result of the negative effects of the ‘Operation Protective Edge’. Revenues from cargo transport increased by 4.5%, mainly as a result of an increase in the number of ton-kms flown, after setting off a decline in the yield.

Operating expenses increased by 2% to $493 million compared to $483.6 million during the equivalent quarter in the previous year. The rate of operating expenses to turnover increased from 75.2% in the third quarter of 2013 to 82.0% in this quarter. The increase in operating expenses was a result mainly of the increase in expenses for jet fuel, an increase in levies and air transition fees, and after setting-off the decline in salary and security expenses.

Salary expenses declined during the quarter, mainly due to the effect of the devaluation in the rate of the shekel compared to the dollar on the Company’s liabilities for employee benefits. The number of the Company’s employees, permanent and temporary, stood at an average of 6,216 employees, compared to 6,109 during the equivalent quarter in the previous year.

The Company’s expenses for jet fuel increased by 5.2%. The increase was due to the effect of the increase in operations and the effect of the increase in the effective price of jet fuel (which includes the results of hedging operations that the Company took). It should be mentioned that the prices of jet fuel in the market declined in the third quarter compared to the equivalent quarter in the previous year, but the Company’s hedging operations resulted in an increase in the effective price for the Company. The rate of jet fuel expenses to turnover increased from 30.3% during the equivalent quarter in the previous year to 34.1% in the third quarter. Total hedging payments in the quarter under report agregated 2.9 million dollars compared to $4.4 million receipts from hedging for the equivalent quarter in the previous year. In addition, the Company recorded expenses of $5.8 million as a result of changes in the fair value of the hedging transactions, which are not recognized as hedging (revenues of 2.4 million dollars during the equivalent quarter in the previous year).

Gross profits amounted to $108.3 million (18.0% of turnover), compared to $159.7 million for the equivalent quarter in the previous year (24.8% of turnover).

Income from operations amounted to $29.1 million, compared to $75.6 million during the equivalent quarter in the previous year.

Net financing expenses during the quarter amounted to $15.4 million compared to net financing income of $5.2 million during the equivalent quarter in the previous year, mainly due to the results of hedging the rates of exchange.

Net profit for the third quarter of 2014 amounted to $10.1 million, compared to $57.9 million for the third quarter of 2013.

Cash flows used for operating activities in the third quarter of 2014 amounted to $12.0 million compared to $56.1 million cash flows provided by operating activities during the equivalent quarter in the previous year.

The EBITDA in the third quarter of 2014 amounted to $57.3 million compared to $100.6 million during the equivalent quarter.

Results for the first nine months of 2014:

Revenues for the first nine months of the year amounted to $1,588.2 million, compared to $1,604.0 million during the equivalent period in the previous year, a decline of 1.0% due mainly to the decline in yield as a result of the increasing competition and after setting off the increase in the number of passengers flown.

Operating expenses during the first nine months of 2014 amounted to $1,357.7 million compared to $1,324.4 million during equivalent period in the previous year, an increase of 2.5%.

Salary expenses increased during the first nine months of 2014 compared to the equivalent period in the previous year, mainly due to the effect of the revaluation which occurred during most of the period of report in the average rate of the shekel against the dollar on expenses, most of which are in shekels. The increase was set off by the effect of the devaluation of the rate of the shekel compared to the dollar at the end of the period on the Company’s liabilities for employee benefits.

The Company’s expenses for jet fuel increased by 1.0% compared to the equivalent period in the previous year. This due to the changes in the fair value of hedging transactions which are not recognized as hedging, payments for hedging compared to receipts during the equivalent period in the previous year, an increase in operations and setting off the decline in the prices of jet fuel in the market. The rate to turnover increased from 32.9% to 33.5%. Total hedging payments during the period of report amounted to $1 million compared to $4.7 million of hedging receipts during the equivalent period in the previous year. In addition, the Company recorded expenses of $5.5 million as a result of changes in the fair value of hedging transaction which are not recognized as hedging (an expense of $2.4 million during the equivalent period in the previous year).

Security expenses the Company recorded a significant decline of $14.3 million as result of an increase in the rate of the State’s participation.

Gross profits during the first nine months of 2014 amounted to $230.5 million, which is a rate of 14.5% of turnover, compared to gross profits of $279.6 million (a rate of 17.4% of turnover) during the equivalent period in the previous year.

Operating income during the first nine months of 2014 amounted to $1.8 million, compared to $46.3 million during the first nine months of 2013.

Net financing expenses amounted to $20.9 million compared to $4.0 million during the equivalent period in the previous year; the increase was a result of the hedging transactions on the rates of exchange.

Net loss during the period of the first nine months of 2014 amounted to $13.2 million compared to a profit of $29.1 million dollars during the equivalent period in the previous year.

El Al’s EBITDA for the first nine months of the year amounted to $84.8 million dollars compared to $121.3 million during the equivalent period in the previous year.

Cash flows from operating activities for the first nine months of the year amounted to $147.9 million, compared to $184.6 million during the equivalent period in the previous year.

Additional data:

As of September 30, 2014, the balances of the Company’s cash, cash equivalents and short-term deposits amounted to $138.0 million dollars.

It should be mentioned that during the third quarter of 2014, the Company invested $66.2 million in fixed assets and other assets, mainly in the acquisition of an additional Boeing 737-900 aircraft, as well as repaying current loans of $48.3 million and receiving loans of $75.4 million dollars to finance the acquisition of new aircraft.

Copyright Photo: El Al’s Boeing 777-258 ER 4X-ECE (msn 36083) taxies at London (Heathrow).

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El Al and JetBlue Airways file with the DOT in order to codeshare

El Al Israel Airlines (Tel Aviv) and JetBlue Airways (New York) today filed with the United States Department of Transportation (DOT) seeking approval to codeshare.

Subject to government approval, El Al plans to place its “LY” code on select JetBlue-operated flights to/from New York (JFK/Newark).

El Al currently offers up to 22 weekly nonstop flights from Tel Aviv to New York (JFK/Newark) which easily tap into JetBlue’s growing network. With one stop in New York (JFK/Newark), customers may connect between Israel and 35 JetBlue destinations including Boston, Chicago/O’Hare, Fort Lauderdale-Hollywood, Houston/Hobby, Las Vegas, Orlando, San Francisco, San Juan, Washington/Dulles and West Palm Beach. JetBlue currently serves 86 cities across the United States, Caribbean, and Latin America.

El Al and JetBlue have been interline partners since 2010, allowing customers to purchase single-ticket itineraries, combining travel on both airlines.

Top Copyright Photo: SPA/AirlinersGallery.com. El Al’s Boeing 747-458 4X-ELB (msn 26056) climbs gracefully away from Heathrow Airport near London.

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Bottom Copyright Photo: Fred Freketic/AirlinersGallery.com. JetBlue Airways’ Airbus A321-231 WL N923JB (msn 5960) with the Prism tail fin awaits its runway departure clearance at JFK International Airport.

El Al upgrades its premium cabins

El Al Israel Airlines (Tel Aviv) has announced it is upgrading its Tel Aviv-New York (JFK) route with new Business Class “bed-like” seats and a renewed First Class to be completed by end of May 2014 on its Boeing 747-400s.

El Al President and CEO Elyezer Shkedy: “The upgrade of the premium class seats on our wide-body aircraft is part of our ongoing strategy of upgrading the El Al product and passenger experience. After purchasing our 8 new Boeing 737-900 ER planes, we embarked on a process to fully renew the Business Class and First Class seats on the Boeing 747-400 aircraft. We continue to work on providing the best product and the most advanced service for our customers.”

In addition, El Al is renewing the First Class seats on its Boeing 747-400 fleet and offering customers an intimate, prestigious and redesigned cabin.

El Al Israel Airlines is the only airline offering First Class on nonstop flights to/from North America.

Upgrading Premium Classes on the 747-400 Fleet

Aircraft Interior, Seats and Cabin Appearance:

Interior of Aircraft: The interior of the premium classes on the 747-400 fleet have been redesigned.

Business Class: El Al has renovated its seats to “bed-like” and is offering more space between rows. Business Class on the upgraded aircraft offers 47 seats, instead of 49, with 20 seats on the upper deck and 27 on the main deck.

Business Class Seats:

  • Electrically operated seats
  • Expanded Pitch: 193 – 196 cm
  • Seat Width: 50.8 cm
  • “Bed-Like” Seat
  • Operational Features: sitting and resting positions, leg support, ergonomic support
    First Class: Passengers will enjoy a more intimate and prestigious cabin that ensures their privacy.  The cabin includes 8 First Class seats instead of 12.

First Class Seats:

  • Electrically operated seats providing  ergonomic support
  • Pitch: 2 meter
  • Seat Width: 53.3 cm
  • Flatbed seat

As part of the process, El Al cooperated with Hollandia, a recognized expert in precision engineered sleep systems, to offer a unique mattress which was designed specifically for the comfort of First Class passengers.  The mattress is made with Tempur, a special advanced material used by NASA for upholstering seats on its spaceships. The material is known to be soft and pliable, providing the right support for the body. The mattress is covered with a soft and pleasing to the touch Aloe Vera finish for a coddling experience.

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All Cabin Photos by: Sivan Faraj/El Al Israel Airlines.

Top Copyright Photo: Bruce Drum/AirlinersGallery.com. Boeing 747-412 4X-ELE (msn 26551) arrives at London (Heathrow).

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El Al to start a new low-fare subsidiary called “Up” next year

El Al Israel Airlines (Tel Aviv) has announced it will start a new low-fare subsidiary to compete against the low fare airlines like Ryanair and easyJet that are now flying to Israel. The new subsidiary will be called Up and will be assigned five Boeing 737-800s. Operations are due to be launched on March 30, 2014 from Tel Aviv to Berlin, Budapest, Kiev, Larnaca and Prague according to the Jerusalem Post.

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Up logo (large)

UP (El Al) 737-800 WL (El Al)(LR)

Top Copyright Photo: Rolf Wallner/AirlinersGallery.com (all others by El Al). El Al’s Boeing 737-85P 4X-EKH (msn 35485) taxies at Zurich.

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El Al reports a net profit of $3.7 million in the second quarter

El Al Israel Airlines (Tel Aviv) reported a net profit of $3.7 million in the second quarter. This is a reversal from a loss of $6.1 million in the same quarter a year ago.

The company issued this financial statement:

Profits for this quarter totaled about $3.7 million, compared to a loss of $6.1 million in the second quarter of 2012

Company revenues for the second quarter of 2013 totaled $529.7 million, compared to $516.8 million in the second quarter last year

The ratio of gross profits to turnover increased from 15.1% to 15.5% and totaled $82.0 million compared to $78.1 million in the parallel quarter of last year

Elyezer Shkedy, El Al’s President & CEO:

“The Company continues to match its activities to the realities of the market place and thus continues to become more efficient. During the second quarter of 2013 the Company increased the number of available seats for sale by 7% compared to the parallel quarter of last year, while maintaining a similar level of expenditure and a reduced number of employees. Efficient use and operation of the Company’s aircraft brought about passenger load factors of about 82.4%.

The Company reports a profit as well as positive cash flows, while it continues with its investment plans, including payments for purchases of new Boeing 737-900 aircraft as part of a business transaction for the purchase of six aircraft with options for two more.

The first 737-900 of this contract will enter in service with El Al in October 2013.

As part of the Company’s overall business and operational assessment, El Al continues to reduce the number of aircraft types in operation. During the coming months we plan to remove the fleet of 767-200s, bringing the number of aircraft types we operate to four only (reduced from seven, that included our 747-200s, the 757s and the 767-200s).

During the second quarter, El Al continued to develop its strategic plans in response to world market trend in international civil aviation (including the open-skies policies). The Company is presently crystallizing new plans for short-haul flights using five 737-800s on routes still to be decided by the Company’s Management. The aim is to integrate the new plans and schedules no later than the summer of 2014.

Further to the agreement that was achieved with the Government and the Ministry of Finance when the open skies policy into effect, the Government’s portion for security expenditures for Israeli airlines was increased to 85%, starting 1.5.2013. The balance of the agreement will be implemented during 2013 and in early 2014, if the appropriate terms and conditions of the agreement are met.

The FIMI Investment Company announced that they are giving the Company an extension of 45 days to finalize the conditions for the agreement. This period ends on August 29, 2013. They noted that the negotiations on a new comprehensive labor agreement are advancing slowly.

I do hope that the Company employees grasp the importance of reaching a new agreement. I expect the members of the workers’ committee to act responsibly and to take immediate action to formulate a new collective labor agreement, which, amongst other things, will enable FIMI to become an active investor in El Al; will allow the Company to advance and grow; and will enable the Company to face the open skies policies and the ever-increasing competition successfully.

I’d like to thank the entire El Al family – on the ground, in the air, in Israel and abroad – who work so determinedly and devotedly to overcome the difficult challenges facing us. We are committed to providing our customers with the very finest services and products through our ongoing efforts to surmount and meet the challenging market conditions.”

El Al Israel Airlines published its financial reports summarizing the first half of 2013, as well as for the second quarter of the year. The main points follow:

Financial results for the second quarter 2013:

  • Revenues for the present quarter totaled $529.7 million, compared to $516.8 million in the parallel quarter of last year, an increase of about 2.5%. Revenues from passengers increased by about 4%, the result of the increased number of passengers carried, after offsetting the drop in revenue per passenger-kilometer. Revenues from charter services dropped by about 12.9% as a result of reduced activity of our Sun D’Or charter subsidiary. Cargo revenues dropped by about 6.4% as a result of the reduction ton-kilometer revenues and the general reduction in cargo activities.
  • Operating expenses in the second quarter under review increased by about 2% to about $447.8 million, compared to $438.7 million in the parallel quarter of last year, largely as a result of increased volume of activities, the ratio of which on turnover during the second quarter of 2013 dropped from about 84.9% to about 84.5% during this quarter. In addition to an increase in cost of salaries as explained further on, and changes in currency exchange rates, after offsetting the reduction in fuel expenses – as explained further on. During the 2nd quarter of 2013 the number of permanent and temporary employees in the Company was on average 5,906, compared to 5,938 in the parallel quarter of last year.
  • Aviation fuel costs during this quarter dropped by about $7.5 million compared to in the parallel quarter of last year, a reduction of about 4.0%. Market prices of aviation fuel during the quarter dropped by about 6.9% on average, compared to in the parallel quarter of last year. During the reported quarter the Company recorded costs of $3.9 million as a result of a decrease in fair value of hedging transactions that are not recognized for accounting purposes, compared to costs of about $6.5 million for similar hedging costs in the parallel quarter of last year. On the other hand the increased activities increased fuel costs during the quarter by about $5.8 million, while aviation-fuel hedging expenses grew by about $2.0 million during this quarter, compared to in the parallel quarter of last year ($3.8 million compared to $1.8 million). Fuel costs during the reported quarter totaled about 40.0% of our total operating expenditures, compared to 42.5% in the parallel quarter of last year.
    Cost of salaries during the 2nd quarter of 2013 rose in comparison with the parallel quarter last year. Most of the increase is the result of the strengthening of the shekel exchange rate vis-à-vis the dollar, compared to in the parallel quarter of last year, plus the creeping increase in salaries.
  • Gross profits for the quarter totaled about $82.0 million (a ratio of about 15.5% on turnover), compared to $78.1 million in the parallel quarter last year (a ratio of 15.1% on turnover).
  • The operating profits were about $7.0 million compared to an operating profit of $2.4 million in the parallel quarter of last year.
  • Financing. In this quarter the Company had net financing costs (after offsetting financing revenues) about $2.1 million, compared to net financing costs of $10.4 million in the parallel quarter of last year. The change is largely the result of the benefits of receipts from foreign currency hedging but that was set off by the increases caused by changes in exchange rates.
  • Net profits for the second quarter of 2013 totaled $3.7 million, compared to a loss of about $6.1 million in the parallel quarter of last year.
  • Cash flow from regular activities during the 2nd quarter 2013 totaled about $47.8 million, compared to $14.1 million in the parallel quarter of last year. Cash flow for the first 6 months of the year totaled about $128.3 million.
  • The EBITDA for El Al for the second quarter of 2013 totaled about $31.9 million. Compared to $29.7 million in the parallel quarter of last year.

Results for the first half of 2013:

  • Revenues for the first half of this year totaled about $960.7 million, compared to $945.9 million in the parallel quarter of last year, an increase of about 1.6%.
  • Operating expenditure for the first half of 2013 totaled about $840.9 million, compared to $827.3 million in the parallel quarter of last year, an increase of about 1.6%. The change is largely the result of increased costs of salaries as explained below, while the ratio on turnover remains almost unchanged – about 87.5% in the reported half-year.
  • Gross profits for the six months totaled about 12.5%, reaching about $119.8 million, compared to $118.6 million in the parallel quarter of last year.
  • Operating losses for the first half of 2013 totaled about $29.3 million, compared to an operating loss of about $21.4 million in the parallel quarter of last year.
  • Financing. In the first half of 2013 the Company reported net financing costs (after offsetting financing revenues) of about $9.1 million. This compares to net financing costs of about $18.5 million in the parallel quarter of last year. The change is largely the result of the benefits of receipts from foreign currency hedging but that was set-off by the increases caused by changes in exchange rates.
  • Net losses for the first half of 2013 totaled about $28.8 million, compared to a net loss of about $29.4 million in the parallel quarter of last year.
  • El Al’s EBITDA for the first half year totaled about $20.7 million, compared to EBITDA of $33.1 million in the parallel quarter of last year.

Additional data:

  • As of June 30, 2013 the Company’s cash on hand, cash equivalencies and short-term deposits totaled $121.9 million. It should be noted that during the first half of 2013 the Company invested around $75 million in fixed assets, in accordance with the Company’s multi-annual investment program, in addition to prior financing of the new 737-900s. The Company also repaid current loans totaling $42.1 million and obtained loans of $45.6 million, mainly for the purchase of fixed assets.
  • Company equity, as at  June 30, 2013 totaled $107 million.

 

As reported above, El Al will soon retire its last Boeing 767-200, bringing down the number of aircraft types to four. The carrier had previously retired the last Boeing 757-200 last year.

When the 767-200s joined the El Al fleet, it was the first plane that allowed a direct, nonstop route to Chicago (O’Hare) and Hong Kong. Later on, two 767-200s were used for opening the nonstop route to Miami.

As part of the renewal process, El Al is adding new Boeing 737-900 ER planes.

Copyright Photo: Bruce Drum/AirlinersGallery.com. Boeing 767-27E ER 4X-EAE (msn 24832) taxies at Miami.

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