El Al 2025 Financial Results: Net Profit Hits $410M Despite Yield Erosion

El Al Israel Airlines published its 2025 financial results today (Wednesday), reporting annual revenues of approximately $3.476 billion. While the company recorded a significant net profit of approximately $410 million, this represents a decrease of about 25% compared to 2024, primarily due to rising production costs and exchange rate fluctuations.

During 2025, El Al demonstrated capacity growth, with Available Seat Kilometers (ASK) increasing by approximately 3% compared to the previous year. In the fourth quarter alone, a 5% increase in ASK was recorded, resulting from fleet expansion and increased seat supply. Despite the capacity increase, the company maintained an exceptionally high Load Factor (LF) of approximately 94% for the year. Regarding operational profitability, EBITDAR (Earnings Before Interest, Taxes, Depreciation, Amortization, and Restructuring or Rent costs) totaled $947 million, a decrease of about 15% compared to $1.112 billion in 2024.

The decline is attributed to the effects of the "Am Kalavi" military operation, rising production costs, and the strengthening of the Israeli Shekel against the US Dollar, which impacted operating expenses. An encouraging figure was recorded in financing expenses, which dropped to just $4 million in 2025, compared to $95 million the previous year. This improvement stems from increased interest income on deposits due to the group's rising liquid balances and continued reduction of financial debt.

In terms of liquidity and order backlog, El Al enters 2026 with an order backlog (based on advance ticket sales) totaling $927 million, representing approximately 27% of annual revenue. The company's equity as of December 31, 2025, stands at approximately $1.048 billion.

Cargo Sector: Revenue Decline Despite Capacity Increase

El Al's cargo revenue in 2025 totaled approximately $141.5 million, an 11% decrease compared to revenues of approximately $158.8 million in 2024. This decline occurred despite a 10% increase in cargo volumes (in terms of ton-kilometers) and was primarily driven by market yield erosion on certain routes.

It is worth noting that Ronen Shapira, El Al's VP of Cargo, announced in August 2025 his intention to retire from the position in May 2026.

Despite the annual decline, a recovery trend was observed in the fourth quarter of 2025, with revenues of approximately $40.3 million, representing a 14% increase compared to the corresponding quarter last year.

Profitability in the cargo sector was affected by rising production and operating costs, including fuel expenses and other variable costs related to capacity growth. During the year, the company operated a dedicated freighter (Boeing 737-800) under a wet lease until mid-August 2025, when the aircraft was returned to the lessor. Since then, most of the company's cargo activity has been conducted via belly cargo in passenger aircraft, as the growth of the passenger fleet and the increase in ASK provided additional capacity for freight forwarding.

Cargo operations focused on key routes to Europe, North America, and the Far East, leveraging the company's expanding route network. The company noted that the volume of cargo flown in 2025 stood at approximately 61,000 tons, an increase from approximately 56,000 tons in 2024. The company's strategy continues to rely on operational flexibility to increase El Al's market share on high-demand routes while navigating the volatility of global air freight rates.

El Al CEO, Levy Halevi: "We look forward to 2026, a year expected to be characterized by the return of foreign airlines to Ben Gurion Airport and an increase in passenger traffic. El Al has accumulated significant assets in recent years that will allow it to realize its strategic plan, focus on creating a unique and differentiated customer experience, and explore investments in synergistic fields. We continue to work on increasing seat supply while expanding our route network. We recently announced the opening of 9 new destinations, including 3 long-haul routes, alongside strengthening existing destinations in the upcoming summer schedule, which will be El Al's most extensive yet."

El Al CFO, Gil Feldman: "The year 2025 was also characterized by instability at Ben Gurion Airport with the continuation of the conflict in Gaza and the 'Am Kalavi' operation. In the fourth quarter, a gradual return of foreign airlines began, alongside an increase in passenger traffic at Ben Gurion. Throughout the year, we continued our efforts to expand seat supply and the aircraft fleet to provide an optimal response to flight demand. We concluded the fourth quarter with a net profit of approximately $46 million and the year with a net profit of approximately $410 million. We significantly strengthened the company's financial resilience, deepened the liquidity surplus relative to gross financial debt, and distributed a dividend to shareholders for the first time since 2017. We continue to work vigorously for the company's growth and the achievement of our set goals."