At the end of Q1, many airlines finally started returning to Israel. But it would be short-lived, as Iran directly attacked Israel for the first time on April 13th and many airlines bailed once again.
For example, United suspended Israel service from 10/7/23-3/2/24 after the Hamas attack and from 4/14/24-6/5/24 after the Iran attack. With the threat of another Iran attack, the airline suspended service indefinitely starting 7/31/24.
Delta suspended Israel service from 10/7/23-6/6/24 after the Hamas attack. With the threat of another Iran attack, the airline suspended service from 7/31/24 through at least 8/31/24.
American has yet to resume service after 10/7/23, and has suspended service until at least 3/31/25.
So it’s no surprise to see that El Al’s lucrative North America-Israel market share skyrocketed from 35.5% in 2023 Q2 to 88.2% in 2024 Q2. The airline has truly been a lifeline for keeping Israel connected to the outside world.
In 2024 Q2, the airline earned a whopping $147 million profit (up 150% from 2023 Q2) on revenue of $839 million (up 33% from 2023 Q2).
That’s an incredible figure 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.
In an interview with DansDeals, El Al said the record quarterly profit was due to many factors, including:
- More cargo. A 107% increase in cargo revenue in 2024 Q2 compared to 2023 Q2 was responsible for $57 million in profit.
- Fuller flights: El Al had a load factor of an incredible 92.4% in 2024 Q2, up from 86.8% in 2023 Q2.
- 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 8% 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 the airline had under 40% Israel market share overall in Q2, with healthy competition as airlines ramped up service that quarter. Of the 650K available seats from Israel, 540K were on other airlines. However, El Al 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 17% more per mile flown in 2024 Q2 than in 2023 Q2. 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.
In our call, I took some heat over my decision to book United twice this year, though batting .500 isn’t too shabby as I was able to fly United to Israel earlier this year. If our trips were critical, I certainly would’ve booked El Al. As our planned flight this month was just a family summer trip and was booked on points that wouldn’t be possible to use for El Al, I’m OK taking the hit and waiting for another time to visit the holy land. El Al said they were surprised that more airlines weren’t handing off more customers to them as they have agreements with airlines like United. Then again, United isn’t even allowing people to switch to flights on their joint venture partner Lufthansa Group, let alone to other Star Alliance carriers or El Al.
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 told Reuters that the airline put constraints on how much they’re charging for flights.
With service from dozens of airlines suspended while Iran continues to threaten Israel, El Al seems likely to have a very positive Q3 as well. Does Ayatollah Khamenei realize that the more Iran threatens Israel, the better the Israeli flag carrier performs?
Leave a Reply
48 Comments On "With Passengers Scrambling To Book Seats On El Al In Q2, Israel’s Flag Carrier Notches Record Profits"
All opinions expressed below are user generated and the opinions aren’t provided, reviewed or endorsed by any advertiser or DansDeals.
It is important to know that ElAl is allowing cancellations up to 6 hours before the flight due to the situation and giving a credit voucher.
https://www.elal.com/eng/about-elal/news/recent-updates
is anyone able to help me with how to cancel a flight if my travel agent is closed at that point?
You should be able to claim a voucher here, regardless of where you bought your ticket:
https://www.elal.com/en/PassengersInfo/Pages/CreditSteps.aspx
my question was in regard the actual cancelling of the ticket if its after my travel agents hours.
that link is only to get voucher after cancelling.
I believe that link will cancel it as well.
are you sure?
my travel agents said she thinks you have to cancel first.
I only used it once a couple years ago, but I believe it canceled it.
Anyone else have recent experience?
Yes that link will cancel the flights as well.
Yes that is how you cancel and receive a voucher at the same time, I’ve done it many times.
thanks!
I had an elal flight booked with chase points that was not eligible for voucher, so I called elal and they said that if I request to cancel the ticket, I would be able to use the booking as a future flight credit (only for myself on same route), without getting hit with a no-show penalty. I requested it, and the agent did not properly cancel it, so it did come up as a valid reservation for future use. They asked me for the date/tome of my phone call and the number that I called from, and they listened to the phone call, and was able to reinstate my booking for use a at later date as a future flight credit
Note that the option of getting a voucher is ONLY for tickets *booked* by August 4. If you purchased your ticket after that, you won’t get a voucher unless you paid $29 for LY Protect…
I heard that certain flights had tickets for going up to $3k for economy.
I don’t know this firsthand, so I hate to speculate, but when does it change from “this is the market rate” to “this is price gouging”
?
(Asking for a friend)
Tell yer friend that if no other airline is flying then the amount of tickets is much less then the demand and the price on the market goes up.
(told to me by a friend)
Well, “my friend” knows very well that ElAl is the only option.
That being said, I will clarify and repeat his question:
At what point do you stop calling it supply and demand and start calling it price gouging?
@shmeelu end of AUG RT is like 6500-8k TLV-EWR in Eco reg…..
This is not accurate.
When you search for economy and there is no economy available it may show business and premium availability. Possibly just 1 way will be business.
However economy round trip does not cost that much.
You are correct. Its only eco-way there & it’s pricing premium for returns…
Either way, the point of seats being extremely expensive now is there.
They are allowed as they selling out that is supply & demand
I am sure that they did not AB test the prices…
If they did, they would charge a lot more than 8K a ticket.
Almost 100% of the people flying now are doing so because they have no choice. What’s an extra few Grand if you’re desperate? What’s an extra 10 grand? Price gouging?
Noooo, never…it’s SupPlY anD dEmAnD
Wow. That’s wild.
I used to take into account the tolls and extra cost to fly out of EWR vs JFK…
$6500 for the cheap seats?
Why not $12k or $25k for that matter?
(Forget about the $50K and $100K Business class & first class seats)
One fear is that all the competition sees that the (friarim/suckers) are paying $6k+ …..the prices will forever be artificially higher… No amount of competition will change that.
No, that’s not for coach.
And that’s not how supply and demand works.
If that’s how it works, why is it only $6k?
We agree That the vest majority of people are only flying because they must. Not for leisure.
They could easily charge an extra $2k on top of what they are charging now and fill the same amount of seats or even a few less but the profits would be much higher.
Again, everyone loves to give classes on how supply and demand works … Where do you draw the line?
Where does “supply and demand” end and price gouging begin?
Firstly: There really aren’t that many reasons someone “must” go to Israel. Kid in Yeshiva? I guess yeshivas and seminaries don’t exist in the US, and kids can’t survive a whole 10 months without seeing their parents. Family chasunah? I guess it’s unheard of not to travel thousands of miles and spend (tens of) thousands of dollars to celebrate someone’s chasunah. I mean, if I don’t attend their chasunah, are they really considered married?
Secondly: Price gouging is generally when supply is artificially decreased to cause an increase in price for the given demand. (Although the exact definition is a matter of some debate.)
Considering that El Al is not specifically decreasing capacity to cause prices to go up, I would say they are not price gouging in the traditional sense. That being said, could they artificially keep their prices down so more people could afford to go to Israel? Of course. However, they are entitled to take their profits when they are available.
That’s a Bargain… After all, there’s only one airline now ….
That can happen with many airlines flying, too.
Kenny Rozenberg seems to be loving the lack of competition and enjoying war-time profits. Is there a dividing line somewhere in this between making profits and profiteering?
It’s a fair question, but United acted similarly during COVID. Airlines will respond that’s just supply and demand.
How would you define the line?
When there is very limited supply of the most convenient service and people are willing to pay for that to the point of filling up the planes even at high prices, not sure where or if there is even a dividing line. Maybe it’s more easily defined by if a business owner is or isn’t hoping for a war to drag on in order to maximize extraordinary profits, but since governments are bad mind-readers……
“40% Israel market share overall in Q2, with healthy competition as airlines ramped up service that quarter. Of the 650K available seats from Israel, 540K were on other airlines.”
110K/650K ~17%?
Available seats doesn’t mean filled seats.
El Al filled nearly all of their available seats, other airlines didn’t because they lost passenger trust.
thank you for clarifying
Hi Dan and all, I booked 2 elal tickets for next week with Alaska miles (booked back in April, thanks for the heads up about the ending partnership). Our plans changed. Question is if I would like to cancel the ticket and travel plans, is there any way to monetize this by offering to get bumped off my flight, possibly getting $ plus another flight? My understanding from the Alaskan air cs is that i can cancel up to an hour prior to departure. If anyone has experience in this please chime in. TY
Just flew on ElAl(EWR-TLV), erev Tisha BAv, not recommended and I hope I never get stuck in that position again. But the flight was great. It was quick, maybe to beat Iran there. The ElAl staff was very helpful and accommodating even though minyan didn’t work out but they tried to help us. Their customer service has definitely improved with their pricing. This was my second flight with ElAl in as many years after a 40 year hiatus from flying ElAl.
YOU quote “El Al said they were surprised that more airlines weren’t handing off more customers to them as they have agreements with airlines like United.”
can that be verified as united when they canceled our flight told us that they dont have any agreements with el al where can i find that in writing? and if its true that they have agreement then why cant we sue etc united that they are not transferring onto elal flight when they promised that they would do transfer a passenger to elal flight if they cancel?
thnx in advance
Even if United has an agreement, where did they promise to transfer passengers tickets over?
first of all thnx for replying!
they promised me in 2 phone conversations and we have the recording of it that if they cancel they will transfer me over to elal at no cost to me and then in the end they still refused to do it in the last minute when they cancelled my 9 tickets and had to buy new tickets on elal for over double the price !!! and the executive office wrote to me that they have NO agreements with elal! so there fore wanted to know if that’s true as that might help me against them as well! [we actually made a DOT complaint in nov 2023 but did not hear from them besides saying that they got my email no case number etc]
booked tickets in june for sukos lax-tlv cost $1400 precisely amount i paid 2 years back so book early and thats all that there is to it
When I was wavering about a ticket for my son, I decided to go with the more sure El Al thing even though it was quite expensive. Then, a couple of weeks later, United stopped. Bottom line…he has a ticket, so we’re just looking forward and moving on (and learning lessons).
One can call it “supply & demand”.
However, since El-Al asked the State of Israel for a bailout or loan forgiveness (and got it, essentially paid for by the Israeli tax-payers) just a few years ago, they should have the decency to not make egregious profits off of the same people when the tables have turned.
If it’s a “grab what you can” situation, they should be left to deal with their issues the next time something happens.
I kind of agree with this. They should have to pay back the bailout now that they’re doing well, and that should go back to the taxpayer. And/or at the very least, charge a bit less than absolute top dollar to serve those citizens now that you can and the tables have turned.
I’m sure they’ll do that, as soon as Delta and United pay back their bailout.
Where can I claim the money that united & delta pays back?
Airlines have always charged differently for different classes of seats and more when few seats remained. It has always been expensive to buy a flight when the aircraft is near capacity. I get the feeling the price being charged is no more than that. To boot they are being very flexible with cancellations. Show me I’m wrong.
I dont think its fair to say DUB, RAK, JNB, SSH, IST weren’t profitable. These routes were either new and needed more time or demand plummeted due to the security cliamate post Oct 7.
Uh, that was information from El Al, so unless you have better information… 😉
But yes, other than JNB, those were new routes that hadn’t turned a profit. JNB has been underperforming for some time as that Jewish community continues to shrink and has been on the chopping block for some time. South Africa’s actions and even lower demand were just the nail in the coffin.
Cant really blame the other airlines for not flying given insurance costs and risks- though I am very curious to know how (or why) BA and AF are still flying with others bailed.
El Al have been great with helping people with the flights, especially after Oct 7 from Israel…
Wish they were still flying YYZ…….
The European airlines don’t overnight their crew in TLV, while the NA airlines had to.
YYZers are extremely loyal to AC. Made the route untenable for El Al compared to other options as AC commanded a big price premium there.
If I am in America and trying on a Friday afternoon to buy a ticket on EL AL through Europe to Israel, does the website allow you to or is the purchase option turned off?
Huh, El Al _does_ have an interline agreement with United? Is there anything backing that up anywhere? I was repeatedly told that the reason that they couldn’t rebook us on El Al was that they had no agreement or relationship with them whatsoever and so it was completely impossible, and that if there were an agreement they’d be happy to rebook us on one of their flights. In fact there’s a strong argument to be made that they’re legally obligated to do so, as Israeli law specifies that the airline must provide the passenger with *their choice* of a refund or an alternative flight ticket.