On Thursday, the Israeli airline announced its financials for 2021, which include a net loss of $413 million for 2021, compared to $531 million the previous year. The decline shows positive signs of recovery, but El Al and the aviation industry as a whole are still far from pre-covid numbers.
The losses continue
$413 million is a lot of money, but El Al’s losses are down about 22% from the first year of the pandemic. Despite the substantial loss, there were plenty of positive numbers in the results, signaling a slow but significant recovery. The biggest sign was revenue up 38% to $857 million from $623.1 million in 2020.
In the October-December quarter, revenue increased 137% to approximately $265 million compared to the same period last year. However, the airline recorded a net loss of $110 million during this period, which is $30 million less than in the fourth quarter of 2020. A significant reason for this would be weak sales due to the renewal of restrictions of travel the world.
All Israeli carriers are facing flight disruptions to Dubai due to security concerns. Photo: Getty Images
According to globessaid El Al CEO Avigal Soreq,
The company’s results in 2021, with a focus on the fourth quarter, reflect the continued improvement of the company’s operations and the continued implementation of the strategic program. El Al has recently focused on crisis management and now, with the business stabilizing, process streamlining achieved and financial strength strengthened, we are focused on increasing the capacity of production and development of growth engines.
2022 looks brighter
The threat of the omicron variant may be gone, but the aviation industry continues to feel the effects of the pandemic. Nonetheless, this year presents favorable circumstances for the industry to thrive near pre-pandemic levels. Nothing can be said for sure at this point, but 2022 should help El Al and many other carriers return to profitability, or at least minimize losses.
But running a profitable airline was tough enough before the pandemic wreaked havoc on the industry. In some context, El Al’s revenue for 2019 was $2.18 billion, and the airline still suffered a loss of $59.6 million for the year.
El Al is in the early stages of acquiring Arkia. Photo: Getty Images
The Israeli airline has a few hurdles to clear before things can run smoothly again. First, El Al was forced to limit flights to the United Arab Emirates due to security disputes between the two states. The normalization of ties with the Arab government in 2020 has opened several new opportunities for Israeli carriers, but recent developments point in the opposite direction.
Stay informed: Sign up for our daily and weekly summaries of aviation news.
Additionally, the airline is also looking to buy Arkia, another Israeli carrier. If a deal is struck, El Al will benefit greatly from Arkia’s fleet of long-haul, narrow-body aircraft like the Airbus A321LR.
What do you think of El Al’s 2021 results? Do you think the airline can make a profit in 2022? Please let us know your thoughts in the comments.
How could a private jet carrying Russian nationals land in Canada when the airspace was closed to Russians?
About the Author