acvitale
Posts: 1911
Joined: Sat Aug 18, 2001 8:25 am

El AL Loses 36 Million On 97% Loads

Sun Jun 04, 2000 11:22 pm

http://www3.haaretz.co.il/eng/htmls/kat9_5.htm

El Al lost $36 million on record 97-100% loads...

What is going on with these guys?
 
John G
Posts: 84
Joined: Sun Apr 09, 2000 12:03 am

RE: El AL Loses 36 Million On 97% Loads

Sun Jun 04, 2000 11:36 pm

A few possibilities:
1. As ever, security costs are weighing them down.
2. Although they have an overall 97% load factor, they may be operating some routes which are not nearly this full, e.g. their services to the former Soviet Bloc countries.
3. They have some of the highest labour costs in the airline industry, and must pay constant inflation-indexing to keep up with the Israeli rate of inflation, which is over 40%.
 
ronen
Posts: 314
Joined: Wed Sep 15, 1999 9:08 pm

RE: El AL Loses 36 Million On 97% Loads

Mon Jun 05, 2000 12:25 am

john g .the israeli inflation rate in 1998 was 8.6% annually .1999- only 1.3% and from the begining of this year (-) 0.8% (yes a deflation) .for your info.
 
TWFirst
Posts: 5752
Joined: Wed Apr 19, 2000 5:30 am

RE: Acvitale

Mon Jun 05, 2000 2:16 am

I know what you're doing Al!!       


Awesome. Let's see how long it takes him to respond.

You are the master.

An unexamined life isn't worth living.
 
Fleet Service
Posts: 473
Joined: Wed Apr 12, 2000 11:58 am

RE: El AL Loses 36 Million On 97% Loads

Mon Jun 05, 2000 4:49 am

Looks like the yield Mis-Managers from TWA got themselves new jobs! lol
Yes, I actually *do* work for an airline,how about you?
 
acvitale
Posts: 1911
Joined: Sat Aug 18, 2001 8:25 am

TWFirst

Mon Jun 05, 2000 8:51 am

I really did not write it to be vindictive.. It just amazed me after so much El Al 001 bragged about the stats of El Al that an airline could lose money on 97-100% loads.

Further, it is a sign of gross mismanagement on the airlines part to run full and lose money.

I was absolutly appalled after reading that.

I guess it makes sense in a way.. Started looking at the consolidator and net fares and came to the conclusion they are bottom feeding on the yields. Picking up Tower traffic and fares. They basically are buying market share. They lose money on the seats, Basically, they pay you to fly.

Considering the surly attitudes, delays and lack of service it makes sense. They cannot attract high yeild customers so they are stuck with money losers.. Ouch!
 
FLY777UAL
Posts: 4830
Joined: Tue May 18, 1999 3:49 am

RE: El AL Loses 36 Million On 97% Loads

Mon Jun 05, 2000 9:22 am

What about not flying on the Sabbath? Could that have helped significantly to the loss?

F L Y 7 7 7 U A L
 
TWFirst
Posts: 5752
Joined: Wed Apr 19, 2000 5:30 am

RE: Acvitale

Mon Jun 05, 2000 9:27 am

You're right, I think they saw the writing on the wall. Textbook example of how going after bad business for short term gain will hurt you in the long run. I wonder if this strategy was in response to CO entering the market and concerns about other carriers gaining share.

On the side though, come on now, you know you liked being able to post this info for obvious reasons  .
An unexamined life isn't worth living.
 
cedarjet
Posts: 8101
Joined: Mon May 24, 1999 1:12 am

RE: El AL Loses 36 Million On 97% Loads

Mon Jun 05, 2000 9:07 pm

Only being able to fly 6 days a week costs this airline a bloody fortune. Still, that's what you get for running a state (and not a nice one at that) as a theocracy.
fly Saha Air 707s daily from Tehran's downtown Mehrabad to Mashhad, Kish Island and Ahwaz
 
acvitale
Posts: 1911
Joined: Sat Aug 18, 2001 8:25 am

RE: El AL Loses 36 Million On 97% Loads

Tue Jun 06, 2000 12:31 am

It is true that the Sabbath day not flying hurts the carrier. But, on the other hand if you cordinated maint. on the non flying days it might help to offset some of the flying. El Al does lease out some planes to Arkia (whom they still own 25% of contrary to EL Al 001's assertions otherwise) for Sabbath flying and that too must offset some of the losses from non flying on the Sabbath
 
Lindy
Posts: 4722
Joined: Wed May 19, 1999 10:42 pm

RE: El AL Loses 36 Million On 97% Loads

Tue Jun 06, 2000 1:05 am

Is that truth that EL AL doesnt fly on saturdays????? or somebody is making joke here.

Regards,
Rafal
BWIADCA - Nikon D100
 
acvitale
Posts: 1911
Joined: Sat Aug 18, 2001 8:25 am

RE: El AL Loses 36 Million On 97% Loads

Tue Jun 06, 2000 2:03 am

They do not fly on the sabbath. They do lease some of their aircraft to Arkia who does fly on the sabbath. This is not a joke.
 
El Al 001
Posts: 978
Joined: Sun Oct 31, 1999 11:50 pm

RE: El AL Loses 36 Million On 97% Loads

Tue Jun 06, 2000 3:28 am

Hey everyone, sorry its took me so much time, i had today my proportion test to my finals tests.
as for Acvitale new hobby.....very interesting one, but i thought that Israeli newspaper are trash, well i guss not....(but they do mistakes sometimes....)

ANYWAY,

1. funny, I read this article at the Hebrew version, it was'nt mentioned that LY had a load factor of 97%-100%, which is totaly not correct, the load factor stands between 78-82%, I know you Acvitale, you'll say something, but i cant explain this otherwise.
You may call to LY had office at TLV and they should confirm to you my numbers,
LY had office at TLV- 00-972-3-971 6111. you can call them 24 hours a day.

2. this is an old information, i heared this one at the begining of April.

3. January-March monthes are well known by their weaknesses,
many Airlines have a loss at those winter monthes.
because of lack of demand

4. The reasons for this loss are:

A. Fuel cost which climbed at more than 100%

B. Not flying on Saturdays had always made LY to lose money, (not to mention the security costs).
Arkia is able to lease from El Al only the 757's on Saturdays, since Arkia has pilots only for the 732 & 757,
Arkia is not paying much for them, and dont forget that the 757's are only a quarter of the fleet.
All the 744's, 742's, 762's, 737's are just waiting on the ground useless.

C. The prices, just look on the NYC-TLV route, on 1999 the winter price was at about 649-749$ for some certain flights, this year LY price for some flights was 499$ (!),
Because of high competition on many routes (competition with CO-EWR, FF-JFK, RJ-far east, LH, KL, BA, AF,) and the willing to fill the flights the prices had crashed, I for example flew twice to FRA and once to GVA to do some ski on those mounthes, the price for those 3 trips together had cost like one trip on TLV-JFK-TLV on summer,

The point is that even on high loads to oporate a non-low cost company on such low cost prices is not repayable,
surely there are business pax and many other pax who pays higher prices but the prices sobject had cause the airline to lose.
I heared that at the LY's management they were really surprised to hear that the loss wasnt much higher,

The airline must cope with many problems, its amazing that the airline can get profits sometimes, think about it, the airline works only 5.5 days a week, also on holiday, the airline is forbidden of flying (this Friday is a holiday, "Shavuot", the airline will work this week for only 4.5 days)
On routes to the far east, flights get longer in 3.5 hours than they should be, because flying above Saudi Arabia is forbidden to the airline, instead the airline flys above red sea, which makes the flight longer at about 3.5 hours to each diractions (!!!),
The airline said last October that it interested on ordering 3-4 A330-200 to replace the old 762, well, since LY is not getting specialozation, they cant order any aircrafts with out the government approval, and they are not getting, because the traffic minister is not sure that its good for Israel to buy Airbus, imagine, if they would have ordered boeing, i guss we would have seen a 764 in less then 2 years, point is that the government want to decided for LY which a/c to buy, though LY believes the A332 is better for the airline. anyway things might change now because soon there will be a new minister.

There are many problems with LY,
Acvitale & TWfirst, I am very pleased with the topic, its correct, the airline had lose, but not with this ridiculous load factor which was written.
thank you for giving me the option to explain.
 
acvitale
Posts: 1911
Joined: Sat Aug 18, 2001 8:25 am

RE: El AL Loses 36 Million On 97% Loads

Tue Jun 06, 2000 3:51 am

EL Al 001,
Thank you for presenting a very good retort to the argument. I think you will agree that the Israeli paper must have made an error as the article cited 97-100% loads in the English version.

Additionally, We all agree that El Al has basically taken very low yielding traffic in order to boost market share.

It must be nice for an airline to be subsidized by the government so that they can effectively buy marketshare at a loss.

In comparision to airlines whom it competes with such as TWA and Continental whom do not have the luxury of operations running at a loss or shareholders revolt and airlines go bankrupt.

You very eloquantly emphasized everything I had said in my earlier posts on El Al, TWA and Continental.
 
El Al 001
Posts: 978
Joined: Sun Oct 31, 1999 11:50 pm

RE: El AL Loses 36 Million On 97% Loads

Tue Jun 06, 2000 3:57 am

And i thought you'll say that facts are flexible with me....
thanx.....
 
acvitale
Posts: 1911
Joined: Sat Aug 18, 2001 8:25 am

RE: El AL Loses 36 Million On 97% Loads

Tue Jun 06, 2000 4:05 am

I think the facts are clear. You agreed.

The paper cited one set of numbers in the linked article. You gave a different set.

You agreed that El Al operates at a loss and buys low yield market share to get it's 50% marketshare number. I agreed with you.

I have no problems when you cite correct information. I love it when we agree..

TWA and Continental have the high yield business (including the bulk of full fare C/J business) and El Al has captured much of the Tower Air business.
 
El Al 001
Posts: 978
Joined: Sun Oct 31, 1999 11:50 pm

RE: El AL Loses 36 Million On 97% Loads

Tue Jun 06, 2000 4:30 am

LY has a high yield business too,
maybe you did'nt know, but the demand for LY business is very big, they have this flight named ly011 on the TLV-JFK, the flight was created for businessman!
it leaves TLV at 16.30, and lands at JFK at 20.45
the business and first class is always full, there are more than 7000 platinum gold members at LY who are flying with them 4-6 times a month, those members get always upgrade (you know, they get all those many extras...) and they always fly business or first (my father is one of them, and many of our friends) and they are very pleased with the service.
Just look at their 738 & 73G, i've never seen an airline who has 24 b/c seats on a 73G, and we are not talking about something like LH & SR 32X configuretion, we are talking about a "real" business class seats with 38 inches and 2-2 configuretion.

anyway, no more fights, peace.
 
acvitale
Posts: 1911
Joined: Sat Aug 18, 2001 8:25 am

RE: El AL Loses 36 Million On 97% Loads

Tue Jun 06, 2000 4:53 am

I agree they fill their Business class but according to the DOT numbers. The number of passengers who paid for Business class versus who paid for coach and got upgraded is all telling. In that catagory TW and CO lead LY dramatically. All carriers tend to fly with all seats taken in C/J class as upgrades are derigour.
 
avion
Posts: 2126
Joined: Tue May 18, 1999 1:28 am

RE: El AL 001

Tue Jun 06, 2000 4:57 am

Theb SR and LH business classes are not on the same kind of routes. The 3-2 configurations are on EU operations while flights to TLV have intercontinental biz& first class. So ELAL had to use good business clas to compete with european airlines.
But ElAl do has a good premium share. SR has 96 biz and 364 seats daily to tlv while ElAl has 24 biz and around 120 seats. So in relation ElAL has a good premium business.

Avion

BTW: SR and LH have 75 business class seats on the A 319. But these are only full at peak times and normally its about 20 seats and the divider is moved front.

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