On the eve of its first inclusion in Israel's prestigious TA-35 stock index, El Al reported a 14% decline in net profit for the third quarter of 2026, to $172.2 million, despite a 16% increase in revenue to a record $1.27 billion, compared with $1.07 billion in the same quarter last year. The airline attributed the record revenue to exceptionally strong demand from Israelis traveling abroad during the summer months and the subsequent Jewish holiday season.
According to the company, the decline in profit was primarily driven by a one-time expense related to the revaluation of options and the impact of the strengthening shekel, which together created a $24 million difference between the two quarters.
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El Al reported a 14% decline in net profit for the third quarter of 2026
(Photo: Eran Granot)
El Al also announced a substantial dividend distribution of $116.2 million, following a $106 million dividend in January, its first since 2017. Until then, the company had been prohibited from distributing dividends as a condition of the government assistance it received when it was on the verge of insolvency.
"The second dividend distribution this year reflects the company's financial strength, which has enabled it to maintain growth even in a challenging environment," El Al said in a statement.
El Al shares have risen 20.4% since the beginning of the year and 588.8% over the past three years, making the airline one of the most lucrative investments in the Israeli market for its controlling shareholder, Kenny Rosenberg.
Israeli demand for air travel appears set to continue. El Al's advance booking backlog reached a record $1.1 billion, while its passenger load factor stood at 95%, similar to the previous quarter.
The airline's earnings before interest, taxes, depreciation and amortization (EBITDA) increased by 3%, but higher jet fuel prices and adverse exchange rate movements weighed on the results, costing the company $135 million. Financing expenses rose to $10.5 million during the quarter, compared with $4.3 million in the corresponding period last year.
El Al continued to strengthen its financial position, with cash flow from operating activities rising to $161 million from $127 million a year earlier. The airline reported a net cash position of $910 million, meaning its cash holdings exceeded its debt by that amount.
El Al issued an optimistic forecast for the fourth quarter
(Photo: El Al)
Membership in El Al's frequent flyer program reached 3.78 million, an increase of 306,000 members compared with the same period last year. Of those members, 561,000 hold the airline's Fly Card credit card.
Despite the continued return of foreign airlines to Israel, El Al issued an optimistic forecast for the fourth quarter, projecting a 10% to 14% expansion in operations while maintaining passenger load factors of at least 90%.
El Al CEO Levy Halevy said the airline had delivered operating results at the upper end of, and above, its previous forecasts. "El Al continues to strengthen and is concluding the third quarter with operating performance at the upper end of and beyond the forecasts we presented, all-time record revenue and growth in EBITDAR, despite a significant increase in input costs due to fuel prices and exchange rate fluctuations, alongside further intensification of competition," Halevy said.
"The results reflect the contribution of the growth engines we have developed and the significant steps we have taken to strengthen the company. Increasing seat capacity while maintaining high load factors has enabled us to conclude one of the strongest periods in the company's history, as also reflected in El Al's inclusion in the flagship TA-35 index, another indication of its strength and standing," he added. "We continue to see elevated demand for the company's flights, with a strong booking backlog of approximately $1 billion, alongside continued increases in fuel prices in an environment that remains characterized by uncertainty."
The one-time expense related to phantom options also reveals an unexpected connection between El Al's financial results and the cancellation of the planned sale of credit card company Cal to businessman George Horesh.
El Al's chief financial officer explained to ynet that the airline holds a financial asset under its frequent flyer program agreement with Cal, which entitles it to a payment tied to the credit card company's value when it is sold.
"We have a financial asset under the frequent flyer club agreement with Cal, under which we receive a certain amount from Cal when it is sold," the CFO said. "Because of the delay in completing the transaction, we reduced part of that value by $15 million, reversing a positive revaluation we had recorded in previous years. In addition, this quarter we recorded $5 million in financing expenses resulting from exchange rate differences, compared with $10 million in financing income in the corresponding quarter last year."