Israeli airline El Al said Monday the government has lifted a restriction that had prevented it from distributing dividends, clearing the way for the company to potentially issue payouts to shareholders based on its 2025 profits — one year earlier than previously agreed.
The dividend ban was imposed during the COVID-19 pandemic, when the Israeli government provided financial assistance to help the airline survive the collapse in global travel. El Al last distributed dividends in 2017, paying out 36 million shekels (about $9.7 million at the time). Shares of El Al rose about 2% on the Tel Aviv Stock Exchange following the announcement.
The company emphasized that no final decision has been made regarding a 2025 dividend. However, under the revised terms, El Al will be allowed to distribute up to 30% of its net profit for that year. The permitted payout ratio will rise to 40% from 2026 through 2028.
The move follows the government's recent decision to reduce its participation in funding El Al’s aircraft security costs. Starting this year, the airline will cover 7.5% of those costs — an increase amounting to between $5 million and $10 million annually. The new cost-sharing arrangement will be phased in over six years, ending in 2031.
In return, El Al requested relief from several of its obligations to the Finance Ministry, including the longstanding restriction on dividend payments.
The airline’s renewed push to resume dividends comes after a record profit year, bolstered in part by increased wartime demand. El Al reported a net profit of $554 million in 2024 — nearly five times higher than the previous year. Revenue rose 37% to $3.4 billion, helped by a 14% increase in the average fare per passenger.
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The announcement also comes amid discussions between Israeli and U.S. officials over recently imposed tariffs on Israeli goods. U.S. President Donald Trump introduced a 17% tariff, now temporarily suspended for 90 days. As part of efforts to ease trade tensions, Israeli officials are considering asking El Al to accelerate its aircraft procurement deal with Boeing.