MIAMI — El Al, Israel’s national carrier, remains the sole major airline globally that only operates six days a week. The airline closes down on Saturdays, the Jewish Sabbath. Most airlines would regard this as an almost insuperable problem, but El Al has been coping with it for 20 years now.
As the nation’s flag-carrier, it has to cater for all sections of Israeli society, from secular to ultra-religious groups. It also has to cope with security considerations an order of magnitude greater than those faced by virtually any other airline, while still turning a profit – something it has done in three of the past four years.
At present, El Al is on the cusp of a major re-equipment program, with most of its long-haul fleet due to be replaced by Boeing 787s and innovations such as Premium Economy cabins about to be introduced.
El Al plans to have 16 Boeing 787s in its inventory by 2020, with a further 13 aircraft on option, said CCO Gonen Usishkin. Most will substitute for existing aircraft, as the company phases out six Boeing 747-400s and seven Boeing 767-300ERs.
“Around 80% of the new aircraft will be replacements for the Boeing 747s and the Boeing 767s, but the last two aircraft and the options that we have will allow the airline to expand to new long-haul destinations,” said Usishkin. Increasing the long-haul market is probably the airline’s number one priority, he said.
The Boeing 787s will form the backbone of the long-haul fleet, together with six Boeing 777-200ERs. The precise mix of Boeing 787-8s and larger -9s has not yet been decided but is likely to be around 60-40 in favor of the -9.
The first Boeing 787 is due to arrive in August and will initially be deployed on the Tel Aviv-London Heathrow route. New York Newark will be next, followed by Hong Kong. Further destinations beyond the initial three are still being discussed.
The Boeing 787s will also feature El Al’s new Business-Class and Premium Economy products. The new Business-Class cabin will feature two-meter-long lie-flat seats by Recaro in a 1-2-1 configuration; the company is still debating whether this should also be installed in the existing Boeing 777 fleet.
Premium Economy is a new departure for El Al, with increased legroom, larger in-flight entertainment seatback screens, and porcelain dinnerware. This will be in a four-row, 2-3-2 layout.
Usushkin said El Al had decided to introduce a Premium Economy product for the first time for a combination of reasons.
“We have a lot of corporate travelers who have their own restrictions on Premium cabins. We feel there’s a big market for this kind of product, not only for Business passengers but leisure.”
Competitors were also increasingly introducing this intermediate cabin and El Al felt this trend was worth adopting. Wi-Fi is also due to be rolled out across the fleet.
Usushkin said El Al’s marketplace remained strong, with double-digit growth. “There’s strong demand, but this creates pressure on yields because there are lots of seats on the market.”
Indeed, that excess of seats constituted one of the greatest threats to El Al over the next few years, he said. “The industry has this chronic disease of over-capacity. We don’t care anymore if it’s legacy airline or low-cost carrier (LCC) capacity.”
LCCs such as Ireland’s Ryanair, the UK’s easyJet, and Hungary’s Wizz Air were making their presence felt in Israel, said Usishkin, but this had been anticipated. El Al has had its own low-cost brand, UP, since March 2014, which operates Boeing 737-800s to five European destinations: Berlin, Budapest, Kiev, Prague, and Larnaca.
“It’s a niche operation at this stage, which services more leisure-orientated markets, so it’s higher-density seating without a business class and unbundled prices. It’s doing as well as the other markets.”
Another major development is the acquisition of fellow-Israeli carrier, Israir. Usuishkin was unable to comment on this, as the proposed purchase of the smaller company is still going through the regulatory approval process, notably the country’s competition authorities. If the purchase goes ahead, Israir will become a fully-owned subsidiary of Sun D’Or, itself an El Al charter flight subsidiary.
Israir is a privately-owned leisure company that sells holidays as well as flights on board its own aircraft and Airways understands that El Al wants to take it on in order to diversify its revenue streams.