New York–The Board of Directors of EL AL Israel Airlines has announced that exclusive negotiations with the Boeing Corporation will begin in mid-2017 regarding the purchase and lease of 15 new wide-body 787-8 and 787-9 Dreamliner aircraft with the option to purchase 13 additional aircraft. These aircraft are the latest and most advanced in the world and are considered to be efficient and economical in terms of fuel consumption, utilization and maintenance costs.
“This move is expected to constitute a significant step forward in the optimization of the network of routes, passenger service and the overall flight experience,” said EL AL CEO, David Maimon. “We shall preserve our position as the first choice in flying to and from Israel and offer customers maximum comfort, technological innovations and quality service. I am convinced that this move is a great opportunity to meet the high standard expected of us and continue the momentum of EL AL innovation.”
EL AL Vice President and General Manager, North and Central America, Shmuel Kuzi states, “During the next five years, these aircraft are designated to fly roundtrip from New York (JFK/Newark), Boston and Toronto to Israel and will replace the existing 747-400 and 767 fleet. In addition, as part of the company’s advancement, we are proud to have launched the only non-stop flights between Boston and Israel in June of this year, thereby providing the utmost convenience to our passengers in the New England region as well as easy domestic connections via JetBlue Airways for customers living in cities throughout the USA.”
Regarding the positive 2015 second quarter financial results, EL AL earned a net profit of $17.3 million. In accordance with the resolution of the Board of Directors, for the first time in years, EL AL declared to distribute dividends totaling approximately $24.7 million. Profit before tax in the second quarter amounted to approximately $23.6 million, and revenues totaled about $510.6 million compared to $571.5 million last year. The company’s cash flow from operating activities in this quarter amounted to approximately $79 million, and ended the quarter with a cash and deposit balance totaling more than $186 million.
In this second quarter, EL AL recorded a nearly six percent higher profit than what was recorded in the same period last year, despite an expenditure of approximately $11 million for the new wage agreement.
EL AL recorded a decrease in revenues resulting from a reduction in the number of passengers due to a drop in incoming tourism and price erosion, which resulted from a decline in oil prices and the number of tourists as well as from currency erosion related to the dollar. Additionally, EL AL recorded a decrease of over $57 million in operating costs during second quarter, despite a two percent increase in the company’s operations.
Furthermore, EL AL signed the labor agreement with the employee representation, which will enable the airline to become more efficient and focus on the business challenges, and further their growth within the international aviation industry.
The financial strength and business condition of EL AL enables implementation of the airline’s long-term aircraft acquisition program for replacing wide-body aircraft, which shall highly improve the competitive ability of EL AL in the coming decade.
