El Al Israel Airlines Ltd. (TASE: ELAL) reported a loss of $49.3 million in 2011 compared with a profit of $57 million in 2010. The airline blamed the loss on the sharp rise in the price of aviation fuel due to higher oil prices in world markets. Revenue in 2011 was $2 billion, down 3.6 percent from 2010. Gross profit fell 28% to $278 million and the airline also reported an operational loss of $43 million compared with an operational profit of $88 million in 2010.
El Al said that, "The main reason for the financial results was a rise in operational expenditure due to higher aviation fuel costs and as a result of losing market share due to growing and aggressive competition caused mainly by the implementation of the open skies policy by the Israeli government."
The company stressed that signing the "open skies" agreement, "might adversely influence Israeli airlines due to an additional strengthening of competition, and an increase in carriers and capacity that the agreement will bring, and the lack of ability of Israeli companies to realize equal aviation rights from the agreement."
El Al failed to stem the rise in operational costs and revenue fell. The carrier said that its streamlining plan had only been partially implemented and that 2012 would be a troubled year too.