IsrAir CEO: Our Growth Potential Outpaces El Al
IsrAir CEO Uri Sirkis says the airline's growth potential outpaces El Al. Despite fuel cost pressures, IsrAir targets 3 million passengers next year through fleet expansion, long-haul routes, and its Larnaca maintenance center.
IsrAir Growth Potential Outpaces El Al, Says CEO Uri Sirkis
While El Al's stock has posted gains over the past year, IsrAir's share price has declined. However, IsrAir CEO Uri Sirkis remains firmly convinced that the growth potential of the company he leads is significantly greater. Speaking at the Investment Generation Festival hosted by the financial house in collaboration with Globes, Sirkis stated that "investors love short-term profits, but if you look at the growth engines IsrAir has developed, its chance to double itself is greater than El Al's chance to double itself."
Over recent years, IsrAir has invested heavily in developing multiple growth engines. These include expanding its aircraft fleet, entering long-haul flights, acquiring hotels, and expanding aircraft maintenance operations in Cyprus. Sirkis noted that the company plans to reach 3 million passengers next year, driven in part by an increase in its takeoff and landing slots at Ben Gurion Airport.
The Larnaca Maintenance Center and Strategic Assets
One of the central growth engines highlighted by Sirkis is the aircraft maintenance center in Larnaca, where the company plans to host an investor tour on November 10. Acquired for approximately 8 million dollars, the center has expanded significantly and now provides services to other airlines, most notably easyJet. "We signed a 100 million euro agreement," Sirkis said, adding that he estimates the underlying business is worth around 40 million dollars, which is not currently fully priced into the company's market value.
Alongside expansion plans, Sirkis addressed industry challenges, chief among them the soaring cost of jet fuel. He noted that fuel prices at current levels impact the company's results by roughly 30 to 40 million dollars annually. Consequently, IsrAir implemented efficiency measures that included cutting about 5% of its workforce.
"We conduct individual checks on all foreign crew members employed by the company," Sirkis stated, addressing security protocols and regional developments.
Competition and Regional Dynamics
Commenting on competition on routes to the United States, Sirkis stated that a ticket price of around 1,200 dollars is reasonable under current conditions, though he estimated that normal fuel prices could push fares down to about 900 dollars. He added that without the entry of additional carriers on these routes, ticket prices could easily have reached 1,800 dollars.
Regarding the suspension of FlyDubai's operations in Israel, Sirkis was asked whether this development benefits IsrAir. "Certainly not, just as I am not pleased by a blow to regional stability," he replied. Nevertheless, he noted that the incident reinforces the standing of Israeli airlines. "This event strengthens the brand called IsrAir," he said, adding that the case exposed vulnerabilities in security checks for foreign air crews.
