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El Al reported a loss of $39.8 million in the first quarter of 2009, compared with a loss of $50 million in the same period last year.  Much of the blame attributed to the military operation in Gaza and the worldwide economic crisis.

Revenue for the first quarter of the year totaled $346.7 compared to $469.3 million in the first quarter of 2008, a fall of 26 percent.  The main reason for the decline was because of a 16 percent reduction in passenger traffic.

Operating expenses in the quarter totaled $327.9 million; this compared to $415.7 million in the same period last year a reduction of 21 percent.  The cost of aviation fuel fell by $56.4 million, totaling $107.6 million this compared to $163.9 million in the corresponding period last year.

According to Haim Romano, CEO of El Al, the military operation in Gaza was the main reason for the dramatic fall in the number of passengers in January and February, with the main decline being in incoming passengers. This together with a 30 percent fall in the volume of business traffic, a factor regarded as one of the main engines for growth, resulted in an estimated loss of revenue of some $30-$40.

Romano commented that during the first quarter the company took a number of steps to improve efficiency in order to handle the new global economic reality as well as competition.  El Al recorded a significant fall in expenses with operating costs in the first quarter falling by $88 million, including a reduction of $56 million in the cost of aviation fuel.  El Al also reported a reduction of $27 million in salaries thanks to the removal of 311 positions.

Romano added that El Al showed an increase of 110 percent in internet sales, totaling $21.6 million during the quarter and an increase of 34 percent in telephone sales, totaling $19.5 million.