El Al Posts Q1 Loss As Gaza, Crisis Weigh

El Al Israel Airlines lost money in the three months to March as the economic crisis and fighting in the Gaza Strip hit passenger numbers, though costs fell along with fuel prices.

Israel's national carrier said Tuesday its first quarter net loss was USD$39.8 million, compared with a loss of USD$50 million in the same period last year.

Revenue fell 26 percent to USD$346.7 million.

Fighting in the Gaza Strip in early 2009, which impacted air traffic in and out of Israel, and a decline in business travelers led to a drop of 13 percent in the number of passengers in the quarter, while cargo revenue fell 52 percent.

The company's aviation fuel expenses fell to USD$107.6 million from USD$163.9 million a year earlier.

"Strict management of expenses together with the drop in fuel prices after offsetting for hedging expenses led to a significant drop in the company's costs and better results," El Al President Haim Romano said in a statement.

He estimated that the decline in passengers due to the fighting in Gaza as well as a 30 percent drop in business travel reduced revenue by between USD$30 million and USD$40 million.

El Al maintained a market share of 42.9 percent in Israel, he said.