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El Al airlines Q3 profit falls, to test non-stop flights to Australia
EL AL Israel Airlines reported a 36 per cent decline in third-quarter net profit as salary expenses grew and a move to a new accounting standard increased financing expenses.
The airline also said that it plans to operate test flights to Melbourne and back in the second quarter of 2020, using Boeing 787 Dreamliners, to study the feasibility of flying nonstop to Australia from Israel.
Israel's flag carrier posted a quarterly net profit of US$27 million, down from US$42 million a year earlier. Lower one-off gains in the quarter also hurt profit. Revenue rose one per cent to US$647 million.
The airline said its fuel costs fell 9.1 per cent in the quarter due to the efficiency of its new Boeing 787 jets and a drop in the price of jet fuel.
Chief executive Gonen Usishkin said the airline had signed an agreement to lease three Boeing 737-800s for six years, the first of which will arrive next month and the other two in April.
"Despite the competition at Ben Gurion Airport, the company succeeded in increasing revenue and improving its market share by 2 per cent, as the number of passengers rose 6.5 per cent," he said.
El Al has met with stiff competition from carriers such as Turkish Airlines, Aeroflot, easyJet and WizzAir, which offer lower fares.
It also competes with Delta, United and Air Canada on North American routes.
To win back customers, El Al has been overhauling its fleet, having received 12 of 16 new 787 jets, while also revamping its short-haul fare structure.
The remaining four 787s will arrive by the end of the first quarter of 2020. REUTERS