El Al Israel Airlines: Q2 loss due to higher fuel costs

El Al Israel Airlines released last Thursday its second quarter financial results indicating it had posted a second-quarter net loss of USD$15.1 million, compared with a year-earlier net profit of USD$29.9 million
 
The company's revenues rose 2% in comparison with the second quarter of 2005 to $429 million, reflecting growth in passenger traffic. El Al's Chief Executive Officer Haim Romano said in a statement that operating expenses rose to $311.2 million, mainly because of the rise in fuel prices.
 
He added, however, that in addition to higher fuel costs, the rise in operating expenses can also be attributed to the following factors: Higher aircraft maintenance costs; Higher aircraft leasing rates; Higher labor costs.
 
Last month, El Al said it expected to make a loss in 2006 due to record high fuel costs and the fighting between Israel and Hizbollah. Financial results for the second quarter show that El Al's net loss fell by 50% in comparison with the second quarter of 2005, to $15.1 million.
 
Romano also said that El Al maintained a load factor of 80% despite the "deterioration of market conditions and the much harder business competition". He added that foreign carriers flying to Israel increased seat capacity by 29% while passenger traffic through Tel Aviv Airport rose by only 9%.