Fuel prices propel El Al to operational loss
Israeli airline reports $23.3 million operational loss in second quarter of 2011 against $25 million operational gain in same quarter last year. Company income grows 5.6% to $580 million, but 47% rise in jet fuel costs cuts profitability
El Al's earnings grew by $28.1 million to some $580 million in Q2 which constitutes an approximately 5.6% rise; however, the company explains that a steep 47% rise in jet fuel costs increased expenses by some $63 million to a record 34.6% of the company's turnover.
The company reported a $19.7 million loss as compared to a $14.8 million gain in the same quarter last year.
Total passenger traffic at Ben-Gurion Airport in the second quarter of 2011 rose by 11.5% to 3.1 million passengers as compared with 2.8 million in the same quarter last year; however, El Al's stake in the international flights sector and the charter flight sector dropped to 33.5% against 37.7% in the same quarter last year.
The company's cash flow from operating activities for the second quarter amounted to $20.2 million as compared with $82.9 million in the same quarter last year. The company's equity dropped by $54.1 million from the end of 2010 and as of the end of the present quarter is $193.4 million.
El Al CEO Elyezer Shkedy commented on the reports: "In the second quarter the company dealt, among others, with jet fuel prices soaring to record highs over an extended period of time as well as with currency rate changes.
"Competition is hiking and this is manifest in a 25% addition of seating capacity as compared with the same quarter two years ago and 13% as compared to the same quarter last year.
"We are stepping up efforts to ensure that the company adjusts to the current business circumstances for which we are implementing a plan for the reduction of operating costs."
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