el al plane 298.88.
(photo credit: Ariel Jerozolimski [file])
El Al Israel Airlines is still considering leasing planes as a strategy to expand its fleet despite having shelved its plans last month to buy more aircraft.
"I think for small aircraft the right thing to do is to lease them, while for larger planes, if you get good conditions from the banks maybe it's better to buy," El Al chief executive officer and president Haim Romano told The Jerusalem Post this week. "We might lease aircraft, we don't have any problem with that."
The focus on leasing is in line with global trends among airlines, he explained.
"Among airlines in the world today, US companies in particular, most of their fleets are not owned by them - part is owned and part is leased, it doesn't matter. You can purchase an aircraft and sell it and you can lease an aircraft and decide to give it back."
El Al will still take delivery in 2007 of two new Boeing 777s, which it bought in October 2005 as part of its "El Al 2010 growth plan," but last month canceled its options to buy eight to 10 Boeing 787 Dreamliners after embarking on a recovery plan to offset the plunge in profits seen this year.
Romano noted that he received a letter from Boeing this week stating that the US aircraft manufacturer understands the reasons El Al decided not to commit to the planes and that there are enough available 787s to lease after 2009. Boeing declined to comment on the letter.
Meanwhile, El Al said Wednesday its third-quarter net income fell to $1.77 million from $52.2m. in the parallel quarter last year, while revenues dropped 7.8% to $444.7m., from $485.2m. as the company continues to face increased in competition, a drop in tourism since the war in Lebanon, higher fuel prices and a weakening dollar.
The combination of these events has caused the company to implement a restructuring and cost saving program, which Romano said extends to both operational and fixed costs.
Part of the strategy will be to reduce flights or close unprofitable routes and focus on point of interest destinations such as the US and Far East markets and possibly starting a run to South America, he added.
Responding to suggestions that the airline pursue partnerships with other airlines, Romano said it was part of El Al's strategy. "I think they are right and we are working on it, including for short-haul flights," Romano said. "It's part of our strategy and this is one of the reasons we just signed an agreement with American Airlines and have codeshares with European companies."
El Al is reportedly in negotiations to codeshare with a "major international airline."