At an investment of over $1.25 billion, El Al Israel Airlines Ltd. (TASE: ELAL) today unveiled its Dreamliner airplanes, which will gradually replace its existing fleet of airplanes.
The first of 16 Boeing 787-9s, the world's most advanced passenger airliner, will land in Israel in August, and will be initially used in flights to New York. In the next stage, the airliner will be used for flights to El Al's other destinations in North America (including the new route to Miami) and Hong Kong.
El Al's Dreamliners have 282 seats divided into three passenger classes. Like many airlines around the world, El Al has dispensed with first class. It is offering an impressive upgraded business class, with 32 seats made by the Recaro company that open up into a full bed. The business class seats are divided into eight rows of four seats each, with each row having two seats in the middle and one next to the window. The airliner also has a premium economy class with 28 seats arranged in four rows of seven seats each: each row has three seats in the middle of the plane, and two seats each on the far sides of the isles. 222 tourist class seats are arranged nine seats to a row: each row has three seats in the middle and three seats on the far sides of the isles. Every seat is equipped with a persona Panasonic entertainment system, with a contact screen, loading sockets, etc.
The plane's lighting changes according to the flight arrangement, and the windows are large and spacious. The plane is made of a lighter compound that gives the passengers a more pleasant feeling on long-distance flights. Starting in 2018, passengers will have access to high-speed Internet.
El Al is following in the wake of other airlines, including United Airlines and Air Europa, which are already using the 500 Dreamliners in service, including on routes from Israel to various destinations. The upgrade is a significant for El Al's existing fleet that will not only greatly improve its customers' experience, but also save greatly on fuel consumption, for example, a 47% saving on fuel consumption on the direct Tel Aviv-New York route, compared with El Al's Boeing 747s currently used on this route. Maintenance is also cheaper (fewer overhauls are required), and the Dreamliners can be used more frequently.
Ticket prices are not expected to change as a result of the renewal of El Al's air fleet, as explained by CEO David Maimon today at the launching of the planes. He said, "The prices are subject to supply, demand, and competition, not to the introduction of new airplanes."
Maimon added that as part of Boeing's special relations with El Al, one of the few airlines in the world whose entire fleet consists of Boeing planes, the airplanes are being supplied within only two years of the order.
Outgoing Boeing Commercial Airlines president and CEO and Boeing Corporation vice-chairman Ray Conner commented at today's event on the special relationship between the two companies, saying, "This relationship goes far beyond airplanes. I've been involved in hundreds of sales and deals of planes, and I've visited almost every country in the world. Israel is one of my favorites, and our relations with El Al are among the most special we have anywhere in the world." It can be assumed that his comments also refer to the defense aspect and the huge deals with the IDF, which recently received its first Boeing-made F-35s.
The 16 Dreamliners purchased by El Al will be gradually introduced into flights up until 2020, replacing over that time El Al's fleet of 747-400s and 767-300s. These airplanes are being added to the 737-900s already operating in routes in Europe, which are making El Al's air fleet younger. Under El Al's agreement with Boeing, El Al has an option to buy 13 more Dreamliners.
Maimon went on to say, "We have set ourselves a very high standard of excellence of service and product in order to cope with a competitive market and maintain our standing as the first and preferred choice of passengers traveling to and from Israel. When I first became CEO, I convened the extended management forum, and presented my vision for the coming decade. In order to implement the vision, work teams were set up, and one of them dealt with upgrading and replacing airplanes. There were difficulties and challenges, and I'm proud that the dream has become a reality."
Maimon also commented on the future opening of new routes (for example, a route to San Francisco, for which El Al is not yet competing) and the decision to eliminate first class on the new planes in favor of a luxury business class, which he calls business first, "so that we saw no reason to leave another class on the plane."
As for the fate of first class on El Al's current 777s, Maimon said that a decision would be made in the coming months, stating, "We may replace first class for this model, and upgrade the existing business class."
Minister of Transport Yisrael Katz, who attended today's launch, said, "The open skies agreement puts El Al in a class with the world's most advanced airlines. El Al has managed to withstand the competition and retain a market share of over 30% of civil aviation business. Despite the many concerns of Israeli airlines about the open skies reform, El Al has successfully met the targets it set for itself."
Katz added, "We remember the apocalyptic prophecies that the airlines would collapse as a result of the reform, and I had to withstand heavy pressure from various quarters fearful about the fate of the Israeli airlines. When I learned that El Al had launched low-cost flights (through the UP brand, M. R.-C.), I told the company CEO, 'I'm with you. You have proved that under difficult conditions, you are withstanding the competition. The reform has succeeded because of fair competition, and thanks to El Al's ability to meet the competition in this difficult sector'."
Published by Globes [online], Israel Business News - www.globes-online.com - on June 12, 2017
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