Max Kingsley-Jones/LONDON
El Al is on target to record its first profit for two years as it aims to begin its privatisation process by the middle of 1999. The airline is also close to finalising an order for up to five long haul aircraft.
The airline's president, Joel Feldschuh, says that up to the end of October, El Al was showing a $40 million profit, and is on course to record a profit for the whole year. "The final figure will be slightly lower as we will lose some ground in the last quarter," he says. The move into the black follows a loss of $4 million in 1997 and $83 million in 1996.
"Hopefully next year we will start the privatisation process," says Feldschuh, with the aim to sell off 49% of the airline by "the end of the first half of 1999". The government will retain a 51% shareholding. "I would like to have seen one of the major carriers take a stake, but the government has decided to offer all the shares to the public."
Although the problem of not operating during the sabath has failed to be resolved, Feldschuh claims this should not be viewed as a problem issue, but rather a "challenge" to potential investors. He suggests that the issue could possibly be resolved through new strategies implemented by a revised board that will result from the privatisation. Feldschuh is now looking to improve El Al's utilisation policy with revised schedules and frequencies to provide a "better product, better load factors and higher yields."
The airline will begin its short-haul fleet renewal programme early next year, with the arrival of the first of five Boeing 737-700s and 737-800s. Another new Boeing 747-400 will also arrive along with two secondhand Boeing 767-200ERs. At the same time, El Al plans to dispose of two older 747-200s and two 757s, while two 737-200s will be transferred to the charter division. "If we can reach agreement with the unions to recruit more pilots next year, we could keep these aircraft longer," says Feldschuh.
Next on his agenda is deciding between the Boeing 777 and Airbus A340 to meet the airline's need for a new medium capacity long haul airliner. An order for two aircraft plus three options is planned, with deliveries beginning "in two years". A decision had been expected by the end of 1998, but is not now likely until the end of February.
Although traditionally a Boeing customer, El Al is examining the Airbus offering, and Feldschuh says a mix of A340-300s and -600s is one of the possibilities.
Source: Flight International
