El Al Execs Talk About Operating Through A War

In the aftermath of the pandemic, business was going well at El Al. The Israeli flag carrier saw sustained profitability, a game-changing Boeing 787-9 fleet renewal, passenger experience accolades, peace with its employees, an expanding network catalyzed by the historic Abraham Accords, particularly with Arab nations. There was also well-received new leadership under CEO Dina Ben Tal Ganancia, and supportive ownership by Israeli Americans Kenny and Eli Rozenberg.

Then came the Oct. 7, 2023, Hamas attacks and the subsequent war in Gaza.

“We were left almost alone at Ben Gurion Airport,” El Al VP commercial Shlomi Zafrany said. Overnight, most foreign airlines suspended flights to Israel, including four of the top 10 players in the market: easyJet, Ryanair, Pegasus and Turkish Airlines, according to OAG data. International connectivity plummeted, particularly with the complete suspension of routes to Türkiye, which comprised three of Israel’s top foreign markets. Only a few foreign carriers have continued to operate uninterrupted to Tel Aviv, including UAE carriers flydubai and Etihad Airways—recent entrants via the Abraham Accords.

“These Arab carriers stood by Israel. That is an amazing paradox. They’ve been here every day since Oct. 7, a game changer that none of us expected,” said Mark Feldman, CEO at Zion Tours and Travel, one of Israel’s most prominent travel agencies.

“El Al knew that there was now a calling, and we were going to rise to the occasion, achieve the impossible, and continue to be the bridge to Israel,” El Al COO Omry Cohen said in an exclusive interview with ATW.

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With the attack happening during the Jewish Sabbath, when El Al famously doesn’t fly, the airline was able to reset and cancel virtually no flights in the immediate aftermath of the incursion. “Because we carry The Magen Star of David, we are fully obliged to service the Israeli country,” Zafrany said.

The privatized El Al kicked into overdrive, flying on the Sabbath for the first time in its 76-year history to bring back Israelis called up for emergency military reserve duty and security and to bring home forces stranded abroad, free of charge. The company carried tons of free belly freight for nearly nine months and operated some dedicated cargo flights for relief supplies. To date, El Al has provided 20,000 free tickets to soldiers and flown families of the hostages for free. “Israelis, in their nature, feel that if they need to get somebody, they will go to the top. We got personal phone calls and WhatsApps from soldiers who needed to come from abroad and soldiers in the field who needed equipment in the field, and families that were divided to be reunited,” Cohen said. “There was no asking ‘how you got my number?’ It’s ‘how can I help you?’”

Financially, Cohen says the airline anticipated “dismal losses and almost a COVID scenario of no one flying.” Desperate, it sold $5 million in travel vouchers to help liquidity. The unexpected occurred: people continued to fly, but the traffic mix was completely different. Though incoming and outgoing leisure vanished, relief mission groups, mainly from North America, incoming diaspora from Europe and the US, outgoing Israeli VFR traffic, and surprisingly resilient business travel filled the void. Within a month, El Al’s market share catapulted from 21% to 81%, with average load factors rising to 93%, where they nearly remain today. Cargo tonnage accelerated, too.

With an almost monopolistic situation it did not create, El Al pivoted its network to meet demand. As US and European carriers haltingly suspended and reinstated flights, only to suspend them again, El Al increased seats to New York by 42%, Los Angeles by 73%, Paris by 56%, and London Heathrow by 47%. Athens replaced the connectivity to Istanbul, enjoying 43.5% more seats, with Greece supplanting Türkiye as an Israeli tourist destination and Istanbul as a connecting hub in a move that is equal parts altruistic and commercial. The seat increase is buoyed by the frequent utilization of 787-9s on the short two-hour leg.

“We can put six widebodies into Athens, which is relatively close, and carry many more passengers. There is excellent connectivity from there that’s not operated by El Al,” Zafrany said.

El Al has also increased traffic to Bangkok and Tokyo Narita (NRT) to enable connectivity to other parts of North and Southeast Asia and the large Jewish community in Australia. Phuket, another Israeli leisure stronghold, continues as well. System capacity is up 8% compared to Q2 2023, but El Al is at its limit, given all the constraints.

With El Al redeploying assets, political and commercial factors have led to the suspension of Dublin and Johannesburg, plus the newly minted Abraham Accord destinations of Istanbul, Marrakesh, and Sharm El Sheikh, Egypt. Oman and Saudi Arabia then withdrew their overfly rights, increasing El Al Asia flight times by as much as four hours. El Al’s plans for new bookable Mumbai and New Delhi flights were put on ice, but then resumed.

El Al’s nascent codeshare and frequent flyer partnership with Delta Air Lines is proving more promising than when it launched in December 2023. Delta provides feed to El Al’s increased New York JFK, Newark and Los Angeles flights, and onward connectivity for El Al traffic throughout the US and Canada, particularly where nonstop flights have vanished.

“It’s just genius, giving El Al and Delta a massive leg up to North America. United, which was the market leader with Lufthansa here, is over,” Feldman said.

El Al is not an alliance member, but Zafrany sounds open to the possibility: “El Al is eager to join an alliance, and we’ll do everything needed at the right time,” he said.

RESPONSIVE TACTICS

Record financial metrics driven by over-demand and under-supply are an unexpected upside of the working through the conflict. El Al’s second-quarter unit revenue was up 24% year-on-year. Revenue reached an all-time record of $839 million, a 33% hike over Q2 2023. Net profits surged 149% over the previous year to a best-ever result of $147 million.

The downside is accusations by the Israeli public and an investigation by The Israel Competition Authority over El Al’s higher fares, which are sometimes up to 100% higher than before the war. The company disputes it’s profiteering from the war.

“El Al did not take advantage of the situation. Yes, the commercials are better when the demand is so strong, but all of our routes are price-capped much lower than the full priced fares that we used during normal days,” Cohen said.

Zafrany attributes significant parts of the profit to cargo, network utilization and load factors. He emphasized that the company was “forcing our revenue management system to ignore the demand and reduce the price.”

Feldman points to sharply altered consumer behavior’s effect on the booking curve.

“Because of the war, people aren’t making plans well in advance, so when they decide to fly, it’s usually within the next two or three weeks, and they’ve paid through the nose because there’s simply no spaces left,” he said.

“People are choosing to book El Al no longer just for security issues, though it’s in their mind. But they know it is the only airline, come thick or thin, that will continue flying here.”

El Al realizes this is unsustainable. “We’re not looking to ride this wave. We want this war to be over,” Cohen said.

The commercial situation began to settle into a new normal by the spring of 2024. As foreign capacity returned, El Al’s market share fell to 43%. On the night of April 13-14, an unprecedented barrage of missiles and drones from Iran closed Israel’s airspace for approximately seven hours.

“This is the only case [since the start of the war] in which we canceled flights. We went ahead with the launch of Fort Lauderdale, Florida, on the 15th [of April],” Zafrany said.

The attack turned out to be a blip, and airlines, including Delta and United Airlines, restarted service again. But on July 31, the political leader of Hamas was assassinated in Tehran, exponentially dialing up the rhetoric for severe retaliation from Iran.

“The assassination changed everything. We got lulled into a sense of security when the carriers came back that we could stop booking El Al,” Feldman said. A torrent of new, longer flight suspensions quickly followed, including the US carriers, Lufthansa and KLM, while some airlines like Cathay Pacific, easyJet, and Transavia pushed back their tentative returns to March 2025.

AIRLINE AND WARTIME DUTIES

“There’s no month that is similar to the previous one. So, it’s like inventing everything from the beginning. It is absolutely crazy,” Zafany said.

“Our crews are very creative and motivated to tirelessly keep Israel connected to the world,” Cohen said.

One of those crew, a recently retired veteran of El Al, where he was a captain for 40 years, recalled operating during the early days of the war.

“The mood was a total shock. When I briefed the crew, I saw that everybody was not really aligned with the reality that was happening,” he said.

Staffing an airline when significant numbers of the staff are actively serving in the Israeli Defense Forces poses challenges in terms of crew splitting time between the airline and defending the nation.

El Al’s legendary security has been beefed up with increased protection for crew abroad, as well as procedures for ground operations on the ramp. In-flight challenges include shifting departure and arrival routes depending on whether the hostilities are in the north or south, with runways temporarily closing to commercial traffic, GPS shutdowns at certain times of the day, and other enhanced security procedures.

“Running an airline during a war is something we never experienced at this level,” Zafrany said.

Despite the hostilities, El Al remains bullish.

“Historically, in every situation Israel found itself in, especially geopolitical, it was followed by periods of growth,” Cohen said.

In February 2023, before the attack, El Al unveiled its five-year Rising Above and Beyond strategic plan. Cohen says the ambitious plan is designed to maintain a 24% market share and increase capacity by 42% by 2031. The capacity increase is based on Ben Gurion Airport’s projection of a 10% increase in traffic per year.

“We do not want to be a monopoly. We are best when we compete. We must invest now to ensure that we can be there at the right time,” Cohen said.

This year, the carrier inked a deal for the largest aircraft procurement in its history for 20 Boeing 737 MAXs plus 11 options and three additional Boeing 787-9s with options for six more. The first five years of the MAX deliveries, starting in 2028, are for fleet renewal and the rest for growth, according to Cohen. The four operating Boeing 777-200s are being retrofitted with new cabins before they retire.

In April, El Al completed a $140 million capital raise with its shares added to the Tel Aviv 125 stock index for the first time.

With a melancholy resilience, Cohen said, “It is sad and funny at once when we built the plan, it’s not even an estimation that every two to three years, a major event impacts our industry. But we also know how this industry recovers after events.”