2024 will be remembered as, among many things, a year that foreign carriers stayed away from the Holy Land.
While El Al flew their full schedule last summer, Delta and United only flew their NYC routes. Delta only flew from JFK to Tel Aviv from 6/7/24-7/30/24. United flew from Newark to Tel Aviv from 3/2/24-4/13/24 and from 6/6/24-7/31/24. Flights have been suspended since then. Air Canada only flew to Israel on 4/9/24 and 4/11/24 before suspending service until 6/8/25. American hasn’t flown to Israel since 10/6/23.
That left El Al with a de facto monopoly on nonstop flights between North America and Israel from August 2024 until Arkia began flights last month.
The airline captured a market share of 47.5% out of Tel Aviv in 2024, up from 26.3% in 2023. The reported North American market share was 97.5% with an incredible 96% load factor.
El Al announced today that they earned a $130 million profit in the 4th quarter of 2024, up from $40 million in Q4 2023. The airline made a tidy $545 million net profit for 2024, up from $125 million in 2023, and a new record for the airline.
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.
But the lack of competition is certainly the main factor at play. Q4 flight loads remained at an incredibly high 94%, which certainly helped profits. But also at play was that passengers paid 14% more per flight mile in 2024 than they did in 2023.
El Al notes that they capped economy fares on all routes.
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.
Indeed, one of the biggest problems hasn’t been the cost of flights, but the availability of seats. That backs up El Al’s claim that they capped prices and could have charged even more, if they priced flights solely based on market demand.
El Al also offered capped fares, which offered bargains for those willing to connect in Europe. Alas, those caps ended last month and were not renewed, as more foreign carriers reentered the market.
Arkia has found success on their JFK to Tel Aviv route, to the point that Israir may also join the route. It’s a little odd that neither airline was ready to try that before foreign competition returned, but better late than never?
In the meantime, United resumes service to Tel Aviv later this week, and Delta will do so next month. Prices have already started to normalize and should drop further when more competition comes online, including Air Canada in June. 112 weekly flights between North America and Israel are scheduled for this summer.
That’s good for passengers, perhaps less good for El Al’s 2025 profitability. Then again, we have seen foreign carriers cancel service to Israel on a dime, so we’ll have to wait and see what actually winds up happening.
For her part, El Al CEO Dina Ben Tal Genancia writes, “We welcome the return of foreign companies and continue to establish EL AL’s position as a strong and leading Israeli airline, contributing to the country’s economy and society in Israel. We will continue to work to allow our passengers to trust us so we will always be there at the right moment”.
Do you have plans to travel to Israel in 2025? Which airline will you fly on?
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30 Comments On "In A Year When Other Airlines Abandoned Israel, El Al Reports Over $500,000,000 Net Profit"
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If El Al earned record profits of half a billion dollars, then they probably could have afforded to charge less for their flights. I’m not saying that should have (or that they shouldn’t have), but I think they made the argument that they weren’t profiting from the situation and that the increased costs were a result of the situation on the ground, which clearly wasn’t (entirely) true.
Sure, but that’s the catch-22.
They sold just about every seat they operated. They could have charged less, but that would have exacerbated the seat availability issue, as flights would just sell out sooner.
Yet clearly the price hikes didn’t deter people from flying with them. So clearly there would be a seat availability issue regardless. So then why pass those gouged prices onto us? If no reason other than to walk away with record profits.
And now with most airlines back online, and presumably seat availability being less of an issue, El Al’s prices are still outrageous. Makes one wonder if this really was the reason for the increased cost.
Why is that a catch 22? What’s wrong for the flights to have sold out sooner to a broader base of customers who could afford the tickets? Their way, the seats may have been available for longer, but the consequence is that a lot of people were priced out. It’s not as if raising the price created more inventory somehow.
1. Because then people would kvetch that there are no seats available.
2. Because it makes sense to have seats available for those who need it the most. People going for emergencies, funerals, weddings, and business trips need to go more than the average vacationer than will be ok going another time when there isn’t a seat shortage. By charging more, it preserves space for people who need it more.
3. Yes, they’re a business and are allowed to be rewarded for taking risks when everybody left El Al for dead in 2020.
I get that this is a big profit number, but I don’t begrudge them for it. I’m just sorry I don’t own any El Al stock. 😀
I used to avoid traveling with ElAl.
No more.
Besides that their service has improved immeasurably since Rozenberg took over, I was also impressed with the fact that they kept on flying during this war. And I think they deserve my loyalty.
Agreed.
The service they now give is great. I haven’t flown with them in 20 years until now it’s total change.
Ahh yes, the classic default monopoly plus price gouging.
Get bailed out by the Israeli govt only to completely price gouge the citizens. Socialism for me, not for thee.
Ditto
There’s no monopoly here. Several other airlines are free to fly to Israel but have chosen not to do so this past year. El-Al is not price-gouging; they are acting as a rational player that balances supply and demand. If they sold all their seats at cost – well, as Dan said, all the seats would be snapped up instantly when made available, and no one could enter the country without planning to do so X months in advance.
Yes, and flying El Al (using Alaska miles). Thanks Dan for that tip months ago.
Awesome!
Is booking with Alaskan miles to fly and I’ll still around?
No.
Any business that is running at close to 100% capacity will make tons of money. Many times I looked at the El Al “find me a seat “ feature and there were 10 seats available SYSTEM WIDE. They have a right to make money when they are doing what no one else was willing to do
One of the benefits to El Al of record profits is the driving down of the carrier’s debt. By the end of 2024, the airline’s equity swelled to $527 million, a dramatic turnaround from the $209 million debt it carried just a year earlier. This is huge and augurs well for Israel’s post war economy.
Hopefully Air Canada uses different navigation software than their in flight entertainment does or else they’ll have a hard time finding Israel
Shows that ElAl overcharged their customers by millions of dollars‼️‼️‼️
What are you talking about? I wish I could afford to fly Elal without spending more than I am willing to, but people wanted their product and they charged accordingly. They even capped economy fares. When supply is limited prices will go up.
What does overcharged mean? People were willing to pay. Eretz yisroel is popular and it should be.
I booked a ticket for the summer, using delta points flying El Al
Only 72k rt
Hopefully they take this profit and reprieve time from focusing on competition to consider how to attract costumers and improve website, miles program etc otherwise it will immediately switch back upon UA/DL resuming service where many including Dan mostly avoided ElAL
Sadly, I don’t think they reinvested properly for this.
Agree. A shame. Website still missing basic functionality like a proper flight status
I’m flying Sunday with united
Flying ElAl in June iyH. Fortunately, per your advice, Dan, I used Qantas miles, (that I earned by transferring in Capital one points), and paid only 75,600 plus about $90 fee a round trip. That is just a little more than $800! Thank you Dan!
Nice!
What was the process like for finding availability? and how flexible did you have to be with scheduling?
There is plenty of availability in Economy class. You can always check the Qantas website before transferring in points what they have available. Simply go on to https://www.qantas.com/us/en.html enter your detonations and change to “book with rewards” and it will show you what they have available. Then create a Qantas account, it’s free, and transfer in points accordingly.
An obscene profit on the backs of travelers who paid exorbitantly high prices to a business that had a monopoly on the North American market.
Is it worth waiting to book a July itinerary and wait for capacity to regularize?
Dan, I hereby indemnify you. I know you are just giving a (very) educated guess.