El Al has revised its projected third quarter revenue losses up to $55-65 million.
The projected damage to El Al Israel Airlines due to Operation Protective Edge is much greater than the carrier projected a few weeks ago, and, according to the airline’s revised estimates, the drop in revenue for the third quarter of 2014 will be between $55 million and $65 million.
The previous estimate was for $40-$50 million in lost revenue as a result of the operation. El Al said, “At this stage, it too soon to estimate the effects of Operation Protective Edge on the fourth quarter of 2014.”
The company said that during the operation, El Al absorbed added expenses in adapting their operations and adding capacity, and also in extra operational costs associated with the security situation. The company is taking proactive steps to mitigate damage.” El Al CEO David Maimon said today, “The current estimate is the best we can offer at this time, and we took the cease-fire into account when formulating the estimate. But it is very difficult to predict what will happen going forward. This is a very problematic time.”
Maimon said “Most of the damage is in incoming tourism. Bookings by Israelis have not decreased dramatically, only by a few percent, and now they are returning. But, based on previous operations, we can expect that tourism will take longer to recover – roughly six months. Other than the cancellations we recorded, there are also no bookings for August, or for subsequent months.”
However, he also said, “In the fourth quarter, we are better able to handle expenses, because we know how to shrink in the winter. In the summer, it’s more difficult, because the flights leave [Israel] full.”
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