Israel Aerospace Opportunities El Al AIrline Strategic Plan
Israel’s National Flag Carrier
El Al Airlines became Israel’s national flag carrier on 15 November 1948. Like the entire airline industry, El Al Airlines was hit hard by COVID-19 pandemic and had to cancel all flights and suspend operations. On July 6, 2020, the company announced it had worked out a bailout deal with the Israeli government to make up the hundreds of millions of dollars it had lost due to the pandemic. The proposed deal would net the airline $250 million in government loans and an additional $150 million from its own sale of company shares which, if not sold, would be purchased by the government.
On September 2020 it was announced that Kanfei Nesharim, a company owned by Eli Rozenberg, had bought a controlling 44.98% stake in the airline. Under the prior negotiated bailout deal, the Israeli government, which had committed to buying any unwanted shares as part of a rescue package bought a stake that equals 11.81% of the company. The holdings of El Al’s owners before the bailout, Knafaim Holdings LTD, fell from 38% to 6.2%. Dina Ben Tal Ganancia was appointed as CEO (first woman to hold this position) on May 2022.
Strategic Takeaways Post Covid
The company saw major loses in 2020 and 2021 due to the pandemic. However, 2022 ended with a positive bottom line and Q4 of 2022 was the first time since 2015 that the company had positive net profit. Overall, 2022 results and significant milestones led the company to release ambitious expansion plans. The airline plans to carry some 7.5 million passengers per year through its Ben Gurion Airport hub, thus taking a 24% market share. The airline also intends to expand its Boeing 787 fleet from 16 to 22 aircraft with revenue targets of $3.5 billion by 2028.
El Al currently has forty-five aircraft, comprising twenty-four 737-800s and -900s plus fifteen Boeing 787-8s and -9s and six 777-200ERs. The airline has indicated its plan to increase its single-aisle fleet by four to seven aircraft, giving it a total of 28-31 jets, when it implements the 737 replacement. For its long-haul network El Al is already intending to take the 787 fleet to 17, through the completion of its original order for 16 plus the introduction of one additional aircraft and has outlined plans to acquire another five long-haul aircraft by 2028. As for the Wide Body 777 fleet, it will be modernized by updating the interior configuration of four aircraft to match that of the 787s.
These expansion plans present ample opportunities for U.S. companies that offer upgrades, refurbishments, and other services for commercial airplanes as well as for companies that provides and/or service ground support equipment that will be required at the airport to support a larger fleet.
Next Steps
A U.S. company interested in further information about this, or other Aerospace & Defense opportunities, can contact: yariv.moravnik-shavitt@trade.gov. Additionally, U.S. firms interested in expanding sales in Israel should consider working with the U.S. Commercial Service in Israel to explore matchmaking, market research or other assistance that may prove beneficial.
Resources
El Al Airline Investor Presentation March 2023