The effect of the murky labor relations at El Al Israel Airlines Ltd. (TASE: ELAL) will only be seen in the fourth quarter, but the third quarter results released by the airline today already show a decline of over 26% in quarterly operating profit, to $93 million, compared with $126 million in the corresponding quarter of 2015. In the first nine months of 2016, operating profit was $106 million, down from $128 million in the corresponding period of 2015.
El Al's top line was flat in the third quarter, at $647 million, compared with $644 in the corresponding quarter. Revenue in the first nine months of 2016 was $1.6 billion, unchanged from the corresponding period last year.
The decline in El Al's profitability is much greater than the rise in operating expenses, because in the third quarter there was a further drop in the price of jet fuel, which was 15% lower in the quarter than in in the corresponding quarter of 2015. In practice, the price was even lower for the airline, because of hedges it had put in place, and was 26% below the price in the third quarter of 2015.
El Al posted a net profit for the third quarter of this year of $70 million, 24.&% down on the 93 million net profit in the corresponding quarter. For the first nine months of 2016, net profit totaled $83 million, which compares with $94 million in the corresponding period of 2015.
El Al's share price is currently down 3.69%.
Published by Globes [online], Israel business news - www.globes-online.com - on November 22, 2016
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