El Al Israel Airlines published last week its financial report for the first quarter of 2006. The report indicate a first-quarter net loss of $12.4 million, a 33% improvement over a net loss of $18.5 million in the year-ago period.
First quarter revenue totaled $372.5 million, a 17% increase on the corresponding quarter in 2005.
The higher revenue was generated by a 21% increase in passenger traffic and a 5% increase in cargo volumes. El Al CEO Haim Romano said "the drastic increase in fuel costs" prevented it from recording a quarterly profit on the heels of its highest-ever full-year profit of $64.1 million in 2005.
He added that the winter quarter is usually its weakest and that prospects for the rest of 2006 remain strong. Gross profit was up 25.5% to $57.7 million, from $46 million in the corresponding quarter last year. El Al recorded the increase in gross profit, despite the increase in costs caused by rising fuel prices.
Romano noted that the carrier faces growing competition. Delta Air Lines now operates Atlanta-Tel Aviv flights and Israir received government approval to operate Tel Aviv-New York JFK service.
He added “The company is operating in a sophisticated business market characterized by increasing competition from regular airlines as well as from charter companies that have expressed a growing interest in air transport services to and from Israel. The overall market grew by 18% this quarter, while El Al grew by 3%.”
El Al said that its market share increased to 48%, from 47% in the corresponding quarter. Passenger occupancy rate increased to 82%, from 72%.
