Revenues from cargo were responsible for 10% of the overall decline in revenues, mainly as a result of a 27% decrease in the market size for freight to and from Israel
El Al Israel Airlines reported on Tuesday a $39.8 million first-quarter loss, narrowed 20.4% from the $50 million deficit posted last year. Revenue fell 26% to USD$346.7 million as passenger numbers fell 13% year-over-year and cargo revenue fell 52%.
The fighting in Gaza and the severe damage to business travel led to a drop of about150,000 passengers in the first quarter, of whom about 50,000 were El Al passengers, responsible for about 16% of the total decline in revenues.
Revenues from cargo were responsible for 10% of the overall decline in revenues, mainly as a result of a 27% decrease in the market size for freight to and from Israel. Cargo revenues decreased by about 52% compared to the same quarter last year, as a result of the initiated discontinuation of the losing activity of freight aircraft to the Far East that began in the second quarter of 2008, and of a decline in revenue per ton/km due to competition.
The company's aviation fuel expenses fell to USD$107.6 million from USD$163.9 million a year earlier.
El Al CEO, Haim Romano, said in a statement that"Strict management of expenses together with the drop in fuel prices after offsetting for hedging expenses led to a significant drop in the company's costs and better results”.
He estimated that the decline in passengers due to the fighting in Gaza as well as a 30% drop in business travel reduced revenue by between USD$30 million and USD$40 million.