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El Al narrowed its losses in the second quarter as it continued its belt-tightening, and set the stage for this summer’s rollout of Economy Class Plus seats.
And, the airline plans on expanding the distribution of Economy Class Plus seats through travel agents, with an assist from technology-provider Amadeus, by the end of 2012.
Israel’s national airline trimmed its net loss to $6.2 million, compared with nearly $20 million in the second quarter of 2011, as revenue fell 3% to $516.8 million.
“El Al successfully faced the challenges of a world economic crisis during this quarter,” said CEO Elyezer Shkedy. “Our ongoing efforts to increase efficiency to adjust to the reality of the current business climate as well as carefully control expenditures have proven to be instrumental in reducing losses. We are continuing with our medium- and long-term business strategy to reflect our targets and policies for the coming year.”
Belt-tightening and tourism rebound
During the second quarter, the airline trimmed its workforce about 3%, compared with the second quarter of 2011, and saw labor costs decline because of the strength of the Israeli shekel against the U.S. dollar.
These challenging financial results for the second quarter, which ended June 30, took place despite the fact that Israel was on track to have a record summer for tourism, with this impact likely reflected in third quarter results.
That tourism boom occurred despite the rhetorical back-and-forth between Israel and Iran over its nuclear capabilities, as no such attack materialized.
During the second quarter, El Al announced a new product, Economy Class Plus, which launched this summer.
The long-haul and the short of it
With Economy Class Plus, any economy-fare ticket holder can pay an additional $150 for “preferred seating, more leg room and seat recline, a wider seat cushion, a foot rest, a comfort kit and a curtain for privacy,” the airline says.
“It is very useful for long-haul flights and we expect a lot of demand,” Danny Saadon, the airline’s general manager of North and Central America told Skift. “If you fly for an hour and a half somewhere, it doesn’t matter.”
The service, currently available on flights between JFK/Newark and Tel Aviv on El Al 747-400 aircraft, will be expanded to 767 and 777 aircraft by the end of the year, Saadon said.
Passengers currently can book Economy Class Plus on the airline website, but they don’t get an immediate confirmation.
That will change by the end of the year when Amadeus is slated to integrate an ancillary- services sales system with the El Al website for immediate confirmations. And, the airline will also begin distributing Economy Class Plus seats through Amadeus to travel agents, Saadon said.
In May, the airline also introduced El Al Upgrade, which enables economy class ticket-holders to submit a bid to upgrade to business class.
Bidders receive an email between 30 and 48 hours before flight time indicating whether their bid was accepted.