March 21, 2012 / 10:08 AM / 8 years ago

El Al Airlines swings to Q4 loss on higher fuel costs

TEL AVIV, March 21 (Reuters) - Flag carrier El Al Israel Airlines moved to a loss in the fourth quarter, weighed down by higher fuel prices and increased competition from other airlines.

El Al on Wednesday posted a quarterly net loss of $7.8 million, compared with a profit of $16.3 million in the last three months of 2010.

Revenue edged up 1 percent to $485.4 million as a 1.5 percent increase in passenger revenue offset lower cargo revenue.

Operating expenses increased 2.2 percent to $402.4 million, mainly due to higher jet fuel prices.

El Al said that while jet fuel prices jumped 41 percent in 2011, hedging transactions narrowed the effective increase to 18 percent for the airline.

The Israeli carrier’s market share from Tel Aviv’s Ben Gurion International Airport fell to 33.9 percent at the end of 2011 from 37.1 percent in 2010. Its load factor slipped to 80.3 percent from 81.6 percent.

“In 2011 El Al faced continued rise in competition from giant partnerships and foreign companies which more than doubled in the past five years,” El Al Chief Executive Elyezer Shkedy said, adding that the Israeli government was about to make a final decision regarding an “open skies” policy with the European Union.

The airline implemented a series of cost-cutting measures last year, including the elimination of 200 positions in the last quarter. (Reporting by Tova Cohen; Editing by Helen Massy-Beresford)

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