El Al net profits decline despite increased passenger traffic, record third-quarter revenue

NOVEMBER 5, 2026 17:38Israeli flag carrier El Al reported record revenue for the third quarter of 2026 on Thursday, but its net profit declined despite increased passenger traffic and strong demand for flights.The results come as El Al joins the TA-35 Index, which tracks 35 of the largest companies listed on the Tel Aviv Stock Exchange. The airline has been at the center of public debate in Israel in recent years, facing criticism over high ticket prices while earning praise for maintaining flights during wartime.El Al reported a net profit of $175 million for the third quarter, down approximately 14% from $203 million during the same period last year. Revenue, meanwhile, rose 18% to a record $1.27 billion, reflecting increased activity even as the airline's overall profitability declined.The company estimated that higher fuel prices and exchange rate fluctuations added approximately $135 million to its expenses compared with the third quarter of 2025.Despite these additional costs, earnings before interest, taxes, depreciation, and aircraft leasing expenses rose approximately 3% to $367 million, supported in part by a 7% increase in revenue per available seat kilometer, a key measure of airline performance.An El Al 787 and 777 at Ben-Gurion Airport, October 13, 2026. (credit: YOSSI ALONI/FLASH90)El Al attributed the decline in net profit primarily to a one-time expense related to the revaluation of a phantom option, a form of equity-linked compensation, which accounted for a difference of approximately $24 million between the two quarters.The airline also expanded its flight capacity, with available seat kilometers, a measure of passenger capacity adjusted for flight distance, increasing approximately 9% following the expansion of its fleet.Despite the additional capacity, El Al maintained an average passenger load factor of approximately 95%, largely unchanged from the same quarter last year. That means only one in every 20 seats on its aircraft remained empty, on average.Advance bookings also remained strong. El Al's order backlog reached approximately $1.1 billion at the end of September, up 16% from the same period last year. The figure includes advance payments for airline tickets and vouchers.Beyond its flight operations, El Al reported continued growth in its customer loyalty programs. Its frequent flyer club reached 3.78 million members, up about 306,000 from a year earlier. The number of FlyCard credit cards also reached approximately 561,000 as of the report's publication.The airline also announced a dividend distribution of approximately $116 million, its second this year.Airline CEO points to strong demand despite rising costsEl Al CEO Levy Halevy credited the airline's employees for its performance, highlighting their role in expanding operations and maintaining service standards."The achievements we are presenting today would not have been possible without the professionalism and dedication of El Al's employees," Halevy said. "Their work on the ground and in the air forms the foundation of our ability to expand our operations and provide our customers with quality service."Halevy also pointed to the airline's inclusion in the TA-35 Index as a sign of its financial strength, while acknowledging the challenges posed by rising fuel prices and continued uncertainty."Increasing seat capacity and maintaining high occupancy rates enabled us to conclude one of the strongest periods in the company's history, as reflected in El Al's inclusion in the flagship TA-35 Index, another expression of its resilience and standing. We continue to see elevated demand for the company's flights, with a strong order backlog of approximately $1 billion, alongside continued increases in fuel prices in an environment that remains characterized by uncertainty."El Al shares fall despite record revenueDespite the record revenue, investors reacted negatively to the results, sending El Al shares down approximately 5% in Thursday morning trading after a 3.7% decline on Wednesday.The losses followed several months of strong but volatile gains. On August 5, when El Al released its previous quarterly results, its shares surged approximately 15%. The stock gained another 17% between the close of trading that day and Wednesday.Overall, El Al shares have risen approximately 45% over the past six months, a period marked by sharp fluctuations in the airline's stock price.Follow us on Google