El Al Profits 5X in 2024 Amid Accusations of Price Gauging
El Al Israel Airlines has reported a substantial increase in net profit for 2024, reaching $545 million—a nearly fivefold rise from the previous year’s $117 million. This surge is largely attributed to El Al’s unique position as one of the few carriers maintaining flights to Tel Aviv during the recent conflict, while many foreign airlines suspended their operations due to security concerns.
The airline’s revenue also saw a significant boost, climbing 37% to $3.4 billion. In the fourth quarter alone, net profit escalated to $130 million from $40 million in the same period the previous year, with revenue increasing by 26% to $851 million. This remarkable financial performance coincides with a 14% rise in the average fare per passenger and an improvement in the load factor to 94% from the prior year’s 86%.
However, this financial success has been accompanied by public criticism. El Al has faced allegations of price-gouging during the conflict, as passengers reported significant fare hikes amidst limited flight availability. In response, El Al’s CEO, Dina Ben Tal Ganancia, acknowledged the concerns but characterized the perception of fare increases as “exaggerated,” noting that the average fare per passenger rose by 14% over 2023.
To address these concerns, El Al implemented measures to stabilize prices. In August 2024, the airline announced fixed round-trip ticket prices to four destinations: Larnaca at $199, Athens at $299, and both Vienna and Dubai at $349. This initiative was seen by many as a PR stunt, given the very limited amount of tickets available at these prices.
El Al’s initiatives for reserve soldiers in the IDF have also been seen by many as PR stunts. While some have lauded El Al for these programs, many soldiers were required to sign up for El Al’s loyalty program, only to find out the number of awards for reservists were limited and walked away with nothing.
The airline’s strategic plan includes a target of achieving $4 billion in revenue and serving 7.6 million passengers annually by 2030, aiming for a 25% market share at Tel Aviv’s Ben Gurion International Airport. As foreign airlines gradually resume operations following a ceasefire in January, it is anticipated that increased competition will lead to more balanced pricing and expanded options for passengers.
While El Al’s commitment to maintaining connectivity during challenging times is commendable, it is essential for the airline to consider the financial burdens on its passengers. Striking a balance between operational viability and fair pricing will not only enhance customer trust but also uphold the airline’s reputation as Israel’s national carrier.