Israel's El Al airlines loss narrows in Q4 as revenue rises

JERUSALEM, March 19 Wed Mar 19, 2014 9:28am EDT

Related Topics

JERUSALEM, March 19 (Reuters) - El Al Israel Airlines reported a narrower quarterly loss, helped by an increase in revenue from passengers and cargo.

Israel's flag carrier said on Wednesday it posted a fourth-quarter net loss of $3.7 million, compared with a $26.1 million loss in the last three months of 2012.

Revenue rose 8 percent to $499 million, as both passenger and cargo sales gained.

Outgoing Chief Executive Elyezer Shkedy said the airline will continue to take steps to deal with increasing competition, including the launch this month of a low-cost operator, UP, and efficiency measures, such as the retiring of older aircraft.

After reaching an open skies agreement with Europe last year, Israel's government agreed to increase its share in covering security costs for Israeli airlines. Shkedy said the government now covers about 97.5 percent of the expenses.

"This is to allow fair competition," said Shkedy, who is stepping down after four years.

David Maimon, who has held various positions in the company over the past nine years, will take over as CEO.

Operating costs for the quarter costs rose 3.2 percent to $429.7 million. During 2013, jet fuel costs edged up 0.7 percent.

El Al's load factor - a measure of seats sold - rose in 2013 to 82.9 percent from 82.5 percent from the previous year, while its market share at Ben-Gurion International Airport slipped to 32.5 percent from 33.6 percent.

For all of 2013, El Al recorded a profit of $25.4 million compared with a loss of $18 million in 2012.

El Al is in the process of renewing its fleet and has so far received the first two of eight narrow-body 737-900s purchased from Boeing Co last year. Another two 737-900s are expected to join El Al's fleet before the summer, with the remaining four slated to arrive by 2016, El Al said. (Reporting by Ari Rabinovitch; Editing by Steven Scheer)

FILED UNDER: