El Al swings to loss in 2014

El Al  picture: Moshe Shai

Operation Protective Edge and increased competition hit the Israeli carrier.

El Al Israel Airlines Ltd. (TASE: ELAL) swung to a loss and saw revenue fall in 2014 because of Operation Protective Edge in the summer. Revenue fell 1% in 2014 to $2.081 billion and the carrier reported a loss of $28.06 million, compared with $26.66 million profit in 2013.

Passenger revenue fell 0.9%, mainly due to lower passenger-kilometer returns, due to the impact of Operation Protective Edge, and competition. On the other hand, the airline's revenue increased due to a rise in passenger numbers, which was made possible by additional aircraft and more frequent flights. Revenue from freight fell 1.7%, primarily as a result of a decline in ton-kilometer returns, which was offset by a growth in quanity.

There was a 3.4% decrease in other revenue compared with 2013, primarily as a result of a reduction in revenue from maintenance services provided to third parties.

Annual expenses were up 2% to $1.79 billion, mainly as a result of increased activity, mostly for fuel expenses, and an increase in depreciation due to the addition of aircraft.

As for executive pay, El Al CEO David Maimon’s salary cost was NIS 1.7 million, without bonuses. Jacob Lior CEO of one of El Al's subsidiaries received a salary that cost NIS 1.5 million, and three additional company vice presidents received NIS 1.5 million, NIS 1.26 million, and NIS 1.25 million each in 2014.

With the release of the reports, Maimon said: “I call upon the prime minister and the ministers of tourism, transport, and finance to place tourism at the top of their agenda, as it is a central growth engine in the economy, and to invest resources in bringing tourism to Israel, and in rehabilitating the tourism sector, which is critical for an independent country, and certainly for a country like Israel. The Israeli aviation sector, like the entire Israeli tourism sector, continues last year to deal with the long-term effects of Operation Protective Edge. Unfortunately, when the fighting ends, tourism does not immediately resume its normal course. It takes time for the tourists to forget, and the recovery is slower.”

The annual operating cash flows recorded a decrease to $157 million compared with $185 million in 2013.

Published by Globes [online], Israel business news - www.globes-online.com - on March 25, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015

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El Al  picture: Moshe Shai
El Al picture: Moshe Shai
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