Borovich: No plans for Shabbat El Al flights

Although as a private company El Al does not have to consider the same scheduling sensitivities it did when it was the state controlled flag carrier, Borovich told The Jerusalem Post the issue was not on the agenda at the moment.

By AVI KRAWITZ
November 27, 2005 06:54
4 minute read.

 
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El Al Chairman Prof. Israel Borovich on Thursday denied reports that the airline was considering flying on Shabbat and festivals, saying the company's priority was to expand its fleet on long haul flights. Although as a private company El Al does not have to consider the same scheduling sensitivities it did when it was the state controlled flag carrier, Borovich told The Jerusalem Post the issue was not on the agenda at the moment. "Like any business we will do what is best for us and we may consider it in the future," he said, "but for now we have not had any discussions in this regard." El Al has a market share of 42% for traffic into Israel and faces competition on those routes from foreign airlines that are able to fly in and out of Tel Aviv on Shabbat. Lufthansa, British Airways and Continental Airlines all operate two Tel Aviv flights on Shabbat. Unconfirmed reports indicate that, by not flying on Shabbat, El Al is missing out on revenues of over $25 million per year. The company would have to weigh this against the additional costs involved in extending its work week and the possibility of protests from religious passengers over the issue. Last week, the Rabbinical Center of Europe called on its community rabbis to encourage European Jewry to fly El Al due to the company's adherence to Jewish observances such as not flying on Shabbat and serving Kosher food, it was reported on ynet Thursday. Meanwhile, El Al seems to be managing well enough without the extra day of flying, enjoying its strongest year ever thus far in 2005, as profits were boosted to record levels by an increase in passenger count. The company said on Wednesday that net income for the third quarter rose 10 percent to $52.2m., or 11 cents per share, from $47m., or 10 cents in the same period last year. Revenue increased 17% to $485.2m. for the three month period. Nine-month net profits were $63.6m. The increases came despite the spike in fuel prices that has plagued the industry over the last year. Aviation fuel increased by approximately 43% from the corresponding quarter of last year, the company said, adding about $50m. to expenses in the quarter, before hedging. Hedging by the management saved about $23 million in increased fuel costs in the third quarter, it added. El Al CEO Haim Romano said incoming tourism was one of the driving forces behind El Al's growth. The Central Bureau of Statistics reported last week that for the first 10 months of the year over 1.5 million tourist arrived in the country, showing growth of 27% from last year. The airline also said its passenger revenues grew in the third quarter by about 23% and that seat availability increased by 9%. Borovich said that, in light of the increases, the company was in desperate need to purchase more planes. In October, El Al signed an agreement with Boeing to purchase two 777-200ER aircraft for $246m., due for delivery in 2007. It also has signed leasing agreements for two 737's and one 767, and is looking for another 767, all of which will be added to the fleet early next year. El Al currently has a fleet of 34 aircraft. Romano said the Business segment was another driving force and source of growth for the company. "We made a decision to replace the Business Class seats on some of the aircraft and to invest in upgrading our Business Class product and service," he said. "Together with the fleet expansion, we plan to invest over $320m. over the next two years to finance these improvements. Shares in El Al dropped 1.9% to NIS 3.73 in Tel Aviv but its holding company Knafaim rose 2% to NIS 49.93.

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