Israeli flag carrier EL AL just reported a disappointing quarterly loss and faces intense competition in the TLV market.
EL AL blamed rising jet fuel prices and higher employee salaries for its $29.7MN fourth quarter loss. While revenue grew by 11%, expenses rose by 17%. A year ago, that fourth quarter loss was only $2MN. For all of 2017, EL-AL reported a meager $5.7MN profit, down from $80.6MN in 2016.
Concerning Trend
Chief Executive Gonen Usishkin told Reuters:
During 2017 the company faced increasing competition in the Israeli aviation market as a result of a significant increase in the number of seats of foreign airlines, especially low-cost carriers.
He’s right. We’ve seen increased service from the following carriers–
- Turkish Airlines
- Aeroflot
- easyJet
- WizzAir
- Ryanair
- Pegasus
- Transavia
- Norwegian
- Vueling
- WOW
Aeroflot and Turkish are very much full-service carriers, but routinely offer some of the most attractive pricing.
This new competition has resulted in EL AL’s market share dropping from 32.6% to 28.5% in one year while passenger traffic at Tel Aviv jumped 16%.
EL AL is looking across oceans for more profitable routes. I don’t blame EL AL for looking beyond Europe. European low-cost-carriers place so much downward pressure on pricing it simply may not be worthwhile to compete.
With 16 787s on the way from Boeing, look for new international route announcements later this year. Already the carrier has stated it will fly to San Francisco. United’s SFO-TLV flight is one of its most profitable.
CONCLUSION
It’s not only about profits for a flag carrier. Sometimes losing money is acceptable because of the other benefits a national airline provides. Still, the growing competition cannot be comforting. EL AL has canned its low-cost “UP” subsidiary, rolling it back into EL AL. Can the carrier cater to both budget and premium customers on the same flight? Only time will tell.
Some years back El Al wanted the Israeli government to restrict Lufthansa’s TLV-Germany flights. Oddly enough, Lufthansa’s most profitable route at the time was LH-FRA. Lufthansa wanted to expand to TLV-Berlin. El Al didn’t want that. Lufthansa went to court in Israel and won.
El Al do not fly over Arabic countries. For example, to Jo’burg the plane has to fly over Red Sea to Djibouti, over Ethiopia, Kenya onwards.
Why would anyone want to put up with the abusive Israeli security?
To avoid terror attacks. El Al is the safest airline in the world. Survival matters to some people.
Who has recently died from a terrorist attack on a U.S. or EU airline?
Safety can be achieved without treating everyone with an Muslim surname like a potential terrorist.
You are right
I think technical issues is now the main danger
Where elal is a total failure
@Anthony I’m not sure where you live, but as an American I wonder how or why we put up with such abusive airport security. I’ve only been to Israel once, but didn’t find their security to be at all onerous. I’m constantly disgusted on the other hand with the horrible and unprofessional treatment I have received at JFK, Miami, and Atlanta (and don’t particularly like flying through Frankfurt either).
@Mak, while I personally agree that U.S. airport security is often unprofessional, rude, and sloppy my concern with Israeli airpot security is of another nature–
http://liveandletsfly.boardingarea.com/2017/07/19/tel-aviv-airport-security-horror-story/
While some may defend what I experienced, I naturally hated it and found it to be quite unjustified and punitive.
I did read that when you wrote it Matthew. While it sounds like a real drag, and I wouldn’t have appreciated the scrutiny either, it points out the big difference between the Israeli and US/German approach: Israel selectively chooses those who fit a pre-defined “suspicious” profile, while the US and Germany hassle anybody and everybody without regard to their personal situations. I have experienced all that and more in my home airport in the US on routine flights, and have not only been practically molested, but also implicitly threatened by a manager to whom I politely raised complaints that I ought to not bring more trouble on myself. US security will feel up a Nun in a wheelchair just because they are unaccountable and can, whilst Israel limits its scrutiny to those who it feels — rightly or wrongly — stand out as requiring it. Of course, they are not merely paranoid — people are really out to get them — so perhaps we can make some allowances for that too.
@Mak With all due respect, racial profiling as the “security policy” is a bit ridiculous. At least I can argue with a TSA officer — and report him/her to a supervisor at the end — if he/she is being rude, racist, or unreasonable. Try doing that in Tel Aviv — especially if you have a Muslim surname — and see what happens to you…
What race do you think Matthew was being profiled as? I think his experience in fact proves that it is quite a bit more complicated than you seem to think.
In any case, I think you need to have your head in the sand to engage in the American fantasy of believing that every demographic group has an identical probability of carrying out an act of terrorism. Inconveniencing everybody so as to continue that unsupported supposition, is far more intrusive than identifying the much smaller set of possible threats, and dealing with them.
You are totally right
El Al is investing in smart security agents
Because they are the number 1 target
The problem here in the US is because of discrimination you have to screen everyone to same
The US after so many failures has to take the hardest security screenings on everyone
The difference is TSA will search for explosive & harm materials But el Al are searching for terrorists
As @Matthew has documented (http://liveandletsfly.boardingarea.com/2017/07/19/tel-aviv-airport-security-horror-story/), I’d submit that another problem for ElAl is they really can’t ever expect to have a thriving “connection” business, despite their good geographic location, because of the “horrific security” experiences they dish out.
Elal has the worst frequent flyer program around, one needs to travel 33 transatlantic flights (16 return trips);in order to get a free return transatlantic ticket, in comparison to 10 (5 return) by most Airlines.
They’re silver and gold card program is worthless with absolutely no available upgrades (unless you spend close to 3K on a ticket then you’re “eligible”) like back in the day, it’s no wonder that me and hundreds of thousands of others left an airline that doesn’t care about their frequent passengers.
The only one that are left for you to service are people that are scared of security, and that’s a small amount.
At all the Anti-Israeli mob: Have you actually gone through security screenings in Israel? Security is the same no matter what airline you fly in and out of Israel. Further screening is dictated by factors other than your last name. About 40% of the Israeli population is of Sephardic (Middle Eastern) origin, and have Arabic names.
Israel lives in a hostile region echoed by agenda driven barely concealed Antisemitism from the rest of the world. Every one of its neighbors, and many of the non Jews residing voice genocide routinely, which seems to be acceptable if you already have antipathy vs. Jews.
I fly to Tel Aviv frequently from San Francisco, and on occasion have to fly El A via a connection somewhere. Generally is sucks. The planes I have been on are old, seems like the seats are older (no lie flat in business), AV system very limited, food is poor, and usually it’s expensive. There is no good part.
You forgot to add United to your list of growing competitors. They have a direct flight from San Francisco to Tel Aviv. I have that El Al is starting service from San Francisco on new 787s. Hopefully that will be better. It will be good to have competition on the San Francisco – Tel Aviv flights.
I’d like to respond to Anthony, regarding El Al. Kindly be advised that what occurred in the USA, on Sept. 11, 2001, whereby 2800 Americans, and 500 people of other nationalities lost their lives, because of the savage acts of 19 Arab terrorists, would never have occurred on El Al Airlines. Those terrorists would never have been allowed to board in the first place. El Al places safety over political expediency. El Al would have shot the terrorists dead, had they tried to hijack their aircraft. In fact, such an incident happened on El Al, and at El ticket counters, more than once. In 1970, one Leila Khaled, and her male counterpart actually tried to hijack an El Al flight out of Amsterdam on the way to the USA. A gunfight ensued in the cabin, and the male terrorist was shot dead, by El Al personnel. Ms. Khaled tried to throw a grenade, but she was tackled, and arrested. The El Al flight then landed in London, and turned Ms. Khaled over over to Scotland Yard, and continued safely to New York. In the 1980’s, other Arab terrorists tried to shoot up the El Al ticket counter, at the Rome Airport. They were met by submachine fire, by El Al security guards. The point that I’m trying to make is that El Al has the best airline security in the world. It has not had an aircraft hijacked in 50 years. I don’t mind going through El Al security. In fact, I find their security much more pleasant than dealing with the nitwits who work at the TSA. For example, last Fall, I was flying out of the Port Columbus (John Glenn Airport). I had several tuna fish sandwiches with mayonnaise, along with several jello chocolate puddings, which were wrapped in clear zip lock bags. The incompetent TSA agent made a big deal out of that. I tried to tell her that it was my lunch. There was nothing on the TSA website which expressly prohibited my bringing that food onto an airport. In fact, on the way to Israel via Lufthansa, at the Frankfurt Airport, they looked at my corn beef sandwiches, and didn’t say a word. Hence, If any of you don’t like El’s screening, or the screening at Ben Gurion Airport, then don’t go there. Also, may I add that every El Al aircraft has a missile detection system, which will be used to deflect an incoming missile away from it. In addition, it has a reinforced armor plating cargo compartment, in case a bomb goes off in that area.