Skift Take
Some national flag airlines no longer have a commercial purpose and probably should go out of business. El Al is not one of those carriers. Tourism in the airline's Israel home market is booming, and El Al should be able to ride the wave.
Each Friday this summer, an El Al Airlines Boeing 787-9 — an airplane with a list price of almost $300 million, arrives in Las Vegas in the late morning, then sits for nearly 36 hours before returning to Tel Aviv late the next night.
This is typically not how airlines use their newest, most efficient and priciest assets. But it's normal for Israel's national airline, which grounds its airplanes on Shabbat every week, from sundown Friday to sundown Saturday.
It’s among the many reasons El Al, Israel’s national carrier since 1948, could be the world’s most unusual airline. “People try to compare us to Air New Zealand, but they fly on Saturdays,” CEO Gonen Usishkin said in a recent interview.
It's probably no surprise El Al has struggled to turn a profit in recent years. In the first quarter of this year, the airline said it lost $55 million, a larger loss than in the same period last year, when the Passover holiday boosted revenues. In full-year 2018, El Al lost $52 million, though it posted a small profit ($6 million) in 2017.
Its idiosyncrasies make it tough to run. How many other carriers shut down for a day each week? How many represent countries that have no diplomatic relations with many neighboring countries? How many struggle to sell connecting itineraries because security controls at its home airport are too stringent to make it viable?
But Usishkin, a former combat pilot in the Israeli Air Force, took over as CEO last year, with a mandate to turn the airline, which privatized more than a decade ago, into a more nimble business.
El Al still won’t be flying on the Sabbath, but it is finally confronting the realities of a new era, amid increased competition from U.S. legacy carriers and European low-cost airlines. It is spending to upgrade its fleet and onboard product, while changing where it flies, betting on long-haul flights where the competition is a little less fierce. It would also like its government, which has opened its borders to just about any foreign carrier, to show a little more favoritism to the national airline.
It's not hopeless. Not long ago, El Al operated in a small niche, carrying Israelis and religious tourists, both Christian and Jewish. But in the past decade, Israel has not only established itself as a technologic center, rivaling Silico
