May 29, 2019 / 6:28 AM / 6 months ago

El Al Airlines' Q1 loss widens as revenue drops

JERUSALEM, May 29 (Reuters) - El Al Israel Airlines reported a wider first-quarter loss on Wednesday, saying the timing of the Passover holiday and increased competition led to a drop in revenue.

Israel’s flag carrier said it made a loss of $55 million in the quarter, compared with $44 million a year earlier. Revenue slipped 7% to $429 million, while operating costs fell 5% to $403 million.

The airline said its fuel costs decreased 11% in the quarter due to the efficiency of its new Boeing 787 jets and a drop in the price of jet fuel.

Chief Executive Gonen Usishkin said the main reason for the quarterly drop in revenue was the timing of the Passover holiday, which pushed off travel demand to the second quarter.

“Additionally, revenue was impacted by competition, particularly in routes to the Far East, and routes to Europe, especially from low-cost companies,” Usishkin said.

El Al has met with stiff competition from carriers such as Turkish Airlines, Aeroflot, easyJet and WizzAir, which offer lower fares even though some flights require a layover. It also competes with Delta, United and Air Canada on North American routes.

During 2018, El Al’s market share at Ben-Gurion International Airport fell to 25 percent from 28 percent.

To win back customers, El Al has been overhauling its fleet, having received nine of 16 new dreamliners, while also revamping its short-haul fare structure.

In parallel it has been expanding its longer-haul routes to North America and added flights to Europe.

On Wednesday it said it will launch direct flights to Tokyo in March 2020. (Reporting by Ari Rabinovitch; Editing by Susan Fenton)

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