Q3 started off promising for US airlines flying to Israel.
United suspended Israel service from 10/7/23-3/2/24 after the Hamas massacre, but brought it back from 3/3/24 until 4/13/24. It was suspended again from 4/14/24-6/5/24 after the first Iran attack, but resumed on 6/6/24 and operated until 7/30/24 after the threat of another Iran attack. The airline suspended service indefinitely after that point.
Delta suspended Israel service from 10/7/23-6/6/24 after the Hamas massacre, but brought it back from 6/7/24-7/30/24. It has paused service until at least 4/1/25.
But even with competition on the lucrative US-Israel market for the month of July, El Al set new records.
In 2024 Q3, the airline earned an incredible $187 million profit (up 260% from 2023 Q3) on revenue of $1 billion (up 43% from 2023 Q3). The airline generated $320 million in cash in 2024 Q3, up from $93 million in 2023 Q3. Thanks to the boon, the company will likely be debt-free by the end of the year.
El Al recorded an $80.5 million profit in Q1 and a $147 million profit in Q2. Both of those were previously record-high quarterly earnings.
The airline has truly been a lifeline for keeping Israel connected to the outside world.
El Al’s market share for passengers flying to/from Israel rose from 22.2% in 2023 Q3 to 41.2% in 2024 Q3.
It’s no surprise to see that El Al’s lucrative US-Israel market share reached 86.4% in 2024 Q3. I’d expect that to climb further in Q4.
The profits are incredible considering that Kenny Rozenberg spent just $100 million to buy a controlling stake in El Al when it was on the brink of bankruptcy in September 2020. Back then United was Israel’s lifeline, as it maintained daily service while El Al suspended operations during the pandemic. The old adage is that the quickest way to become a millionaire in the airline business is to start out as a billionaire. Clearly, El Al is doing something right to break that mold and go from an inoperative fixer-upper to industry leader in less than 4 years.
El Al has noted that the profits are thanks to:
- More cargo. Cargo revenue jumped by 139% from 2023 Q3.
- Fuller flights: Planes were 94% (!) full, up from 88% in 2023 Q3
- Higher fare classes: Customers buying up from LITE fares for added flexibility.
- New products: More ancillary revenue from new products like El Al Protect and El Al Flex fares.
- More profitable routes: El Al dropped unprofitable routes like Dublin, Istanbul, Johannesburg, Marrakech, and Sharm el-Sheikh in favor of additional frequencies to cities like Athens, Paris, and NYC.
- More available seat miles and more aircraft: Adding more system capacity thanks to higher aircraft utilization and adding 2 retrofitted 777s to the fleet. The airline hopes to have 5 retrofitted 777s in the skies by next year. Alas, the 747 isn’t going to make a comeback.
- More wet leasing: El Al’s wholly owned Sun d’or subsidiary has been wet-leasing 3 aircraft to add more overall capacity to the system.
El Al also notes that they outperformed other airlines as people learned to buy El Al unless they wanted to deal with last-minute scrambling if their airline suddenly suspended Israel service.
Of course, it’s hard to get around the bottom line, that passengers spent 23% more per mile flown in 2024 Q3 than in 2023 Q3. Part of that is due to passengers spending more on last-minute tickets after their flights on other airlines were canceled. But yes, higher fares are still a big reason why El Al had such a lucrative quarter.
All airlines have pricing algorithms that drive prices up when demand goes up. Is El Al gouging? I don’t think that’s the case, but obviously, it can charge much more when it has such a dominant market position. And unsurprisingly, not everyone is happy about that.
The airline says it has capped pricing to allow people to get back home. It has added flights at capped prices between Athens or Larnaca and Tel Aviv. And CEO Dina Ben-Tal Ganancia has said that the airline put constraints on how much they’re charging for flights.
With service from most airlines suspended, El Al seems likely to have a very positive Q4 as well. Does Ayatollah Khamenei realize that the more Iran threatens Israel, the better the Israeli flag carrier performs?
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36 Comments On "As Foreign Airlines Stay Away From Israel, El Al Reports Another Quarter Of Record Profits"
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There flights are way to expensive. It’s gross the advantage they’re taking out on us.
According to my research, El Al services around 6M passengers annually. Let’s say they serviced 1.5M people in Q3, that would mean a profit of $125 per passenger. I assume that a huge portion of their profits come from business class seats so in reality, if they wanted to break even on economy flights, they would probably be able to give a discount of $25 per ticket. Is that really called price gouging?
@leo, According to my research, El Al currently has a monopoly and is price gauging.
You will have a better understanding how airlines can still be profitable when selling for economy tickets at lower prices, as soon as Akira and Israir start to operate to USA>Israel….
Price gauging vs price gouging. I understand it’s a mistake but important. When something sold for $1 yesterday and today selling for $2 because all other vendors are out, that’s gouging. If something sold for $1 at a loss yesterday and because of other vendors moving out of the area can now sell for a profit, they are entitled to profit.
Profiteering…
100%
While claiming to ‘give back’ by flying two planes on Shabbos to bring back folks from Amsterdam.
Government covered the expenses.
“Clearly, El Al is doing something right to break that mold and go from an inoperative fixer-upper to industry leader in less than 4 years.”
Is it really that they are doing something right, or is it that without the war they would still be trying to catch their breathe?
If their operations were what they were 4-10 years ago, they wouldn’t be making record profits. They were canceling/delaying flights left and right, using wet-leased planes, etc.
It’s the combination of better operations, newer planes, and yes, of course, the lack of competition, as the post notes.
now that they are doing so well can they drop their prices a bit
Ayatollah Khamenei realize that the more Iran threatens Israel, the less affordable it is for regular folks to fly to Israel.
He’s sanctioning us
Once again, a very thorough article with a lot of pertinent details, but I feel like you can put a bottom line on all the reasons why they are doing extreme well in the last year and a 1/2 …
It is because of the war and because of the war.And because of the war..
Those 3 reasons basically sum it up
Well written, facts are that elal cant be price gouging since the last seat currently sells for less then it used to prior to all this mishgas!!! (try pricing last seat on United to anywhere and tell me who is overcharging.)
Happy for Elal and all its investors.
Agree. It’s the basic law of supply and demand for those who have Economics 101
All last available seats are held by travel agents who are also ripping us off
I think this is definitely not a good look when we’re in the middle of the war and people are stranded and having to pay a lot more on ELAL. They should cap all their ticket prices and not have it reflect dynamic prices or come up with a policy that given proof of a cancellation would allow stranded passengers a cheaper fare option. Reporting profits every quarter is very indicative of price gouging in my mind.
They are over doing, you literally cant get a Z class till the and of the schedule
I expect the other airlines will jump back in, at least when Trump takes the reigns.
it’s time to call this for what it is. you can’t scream safety when there are 100 flights per day going in and out of TLV. This is a clear left wing agenda to punish Israel for the war, in turn punishing all of us. It is time for our friendly politicians to force the big 3 to resume Israel flights or lose their route rights.
@Dan make a push on X…
Have you emailed your representative in Congress?! I did
Also Richie Torres sent a letter to dela united and american calling them out for this
I would not be shocked to learn that the IRGC thru a front company ownes a lot of El Al stock.
When all of this is done, I’m less likely to fly the other airlines when and if they return. If you are one of those that is saying that El Al is price gouging – if it was one of the US carriers that had the monopoly – would you expect the prices to be higher or lower than El Al is charging now? (answer honestly).
During Covid, American was one of the only options, yet their prices were much lower – about $700 RT. True, there was less demand, but El Al’s prices for this coming summer were higher than usual (according to Google flights) as soon as theu became available for sale.
It was United. And prices were low because most people were not allowed into Israel.
Even now, demand is extremely high. From the NYC area, El Al is essentially sold out for the next 6 weeks on flights to TLV besides the occasional business class ticket that is available. I have a ticket on El Al that I bought in June for dates around thanksgiving that are comparable in price to what the domestic carriers were charging for round trip to florida during those same dates. You can argue that both are gouging – but as of today, the TLV tickets are sold out, the Florida ones aren’t. So they were gouging even when plenty of seats were still available.
I’m getting sick of all their PR piece’s in the Jewish papers…. They are making us go broke with their insane fares and completely taking advantage of us… This has to stop
“Clearly, El Al is doing something right…”
Are you kidding? Prices through the ceiling! As soon as the war is over and the other carriers return, people will leave them in droves. Total short-sightness, make a couple of bucks now – don’t worry about tomorrow. Best nekamah is abandon them. DL, AA, United – here we come.
Whatever happened with their pilots? Wasn’t that their big issue with profitability before he bought the airline?
While Elal is definitely charging more than normal times, I think a very important fact is being overlooked.
Airlines always price their seats based on the current percentage of seats sold (for example: economy seats are $900 until 50% of the economy seats are sold, and then $1100 for the next 25% of seats……and the last 5-10% of seats are extremely expensive at $2500). Now, in normal times, the 0-50% portion of the plane probably sells out about 3 weeks before departure, 50-75% portion of seats sell out about 1 week before departure…….and the last 5-10% sells out almost until departure time. So in normal times, 3 days before departure could easily see a hefty price tag being that’s it’s the last couple of seats. In short, the airline has different price brackets based on current availability
I believe that Elal hasn’t altered much from the normal pricing plan (they did go up a little), but rather due to the lack of seats available (from other carriers not flying), there has been much more demand. When there is more demand, the flights get booked much quicker. So while in normal times, the 0-50% portion of the plane sells out 3 weeks in advance, now it’s selling out 2 MONTHS in advance, and the 50-75% portion which usually sells out 1 week before departure, is now selling out 1 MONTH before. And the last couple of seats which are normally available close to departure, are selling out 1-2 weeks before departure. The effect this has on the consumer causes is simple: When we search a flight for 3 weeks from now, your getting the results equivalent to the last few seats in normal times, and the prices are not so far off from that. We are not used to seeing these prices in these time frames, but we can’t expect Elal to sell their last few seats cheaper than what they do in normal times just because they are up to their last few seats with 3 weeks left to departure (as opposed to selling their last seats all the way up until departure)
So really what’s happening is the time frames are changing, not so much the price (search flights for a few months from now, and the prices aren’t so crazy). I do agree that their prices for each percentage of the cabin did go up somewhat, but not to the extent that they are crazy. I think they have the right to charge a bit more due to the fact that at this point, you are also purchasing the fact that it’s highly reliable that they will fly, and not make you scramble last minute. Let’s stop bad mouthing them, because they have the ability to charge more (as you see, the supply runs out a week before departure, which means they have the ability to charge more, and still fill the flight)
Clearly, El Al is doing something right to break that mold and go from an inoperative fixer-upper to industry leader in less than 4 years.
Here in the us we call it “price gouging”
Dan, You’re mentioning that “Clearly, El Al is doing something right to break that mold and go from an inoperative fixer-upper to industry leader in less than 4 years.”
I am not sure why they deserve any credit for their profit boom. The reason is obvious, they are the only airline flying from the USA to TLV and even from the rest of the world there is very little competition left. Its their good luck, not anything they have done, except for gouging the prices. Hakol beyedei shumayim.
https://www.dansdeals.com/more/news/airline-news/as-foreign-airlines-stay-away-el-al-reports-another-quarter-of-record-profits/#comment-1744827
Monopoly has caused flight prices to skyrocket.
And Finally the Israeli government gave permission for Akira and Israir to operate to USA and they will start leasing European/USA planes….
ILTV Israel News 11/21/24: due to the ongoing war, Major airlines like Lufthansa, Virgin Atlantic and United suspend the operation to tel Aviv, Leaving Israeli airline ElAl as the sole operator that connecting Israel to USA, this Monopoly has caused flight prices to skyrocket, making travel a luxury a few can afford.
Link to ILTV:
https://youtu.be/wdpoOAjPcqQ?feature=shared
3 things can be true at once.
1. TYPICALLY (when there is a healthy amount of competition) airlines use dynamic pricing and pure supply/demand will dictate prices.
2. Their operations have improved in the past few years.
3. They are currently THE ONLY AIRLINE flying to North America which skews the whole supply/demand structure and creates a massive monopoly.
Adding to that, the fact that they are a Jewish owned airline, serving Jewish passengers, flying to/from the Jewish state, and you would expect them to not take home triple digit profits on the backs of their Jewish brethren.
Nothing wrong with making money, but the question is at what cost to others, and from who are you making that money.
Their pathetic PR stunts, definitely don’t help.
It’s time to increase flights on El-Al, Arkia and Israir (evan Air Haifa). They need to increase flights to bring down costs.