Israir to forgo dividends: Airline to receive $4-8 million in government compensation
Alongside a $32 million loss in the first half of 2026, Israir is banking on its new New York route, state compensation, and a recovery in demand to return to a growth trajectory.
The airline Israir published its financial results for the second quarter and the first half of 2026 on Wednesday, recording a loss of approximately $32 million for the half-year period.
According to Israir, the company is navigating one of its most challenging periods to date, stemming from the war in Iran, a decline in demand, a sharp rise in fuel prices, the strengthening of the shekel against the dollar, and volatility in euro-dollar exchange rates. Additionally, the company incurred costs of about $4 million in preparation for operating its wide-body aircraft fleet and launching operations to New York.
Israir estimates the impact of the war in the first half of the year at approximately $26 million. Concurrently, the company confirmed in its reports that it will receive compensation from the Ministry of Finance expected to total between $4-8 million. This compensation, first reported by Globes, is conditional upon the airline not paying dividends in the coming year. Essentially, the company's announcement that it will receive this support confirms it will not be distributing dividends.
Furthermore, Israir incurred costs of about half a million dollars related to establishing a partnership with the SuperFly credit card club. However, the company estimates that its share of profits from the club's activities during 2026 will range between $3-5 million, which will be reflected in the coming months.
Operating the New York route
In the first half of the year, Israir's revenues totaled $249.5 million (compared to $273 million in the second half of 2025), with a gross profit of $4 million (down from $20.2 million). The number of passengers for the current half-year stood at 640,000, compared to 824,000 in the same period last year.
Regarding the third quarter, revenues stood at $140 million, gross profit totaled approximately $1.4 million, and passenger volume reached 427,000.
Looking ahead, Israir expects a trend of operational improvement in the second half of 2026, driven by several key factors: the launch of the New York route, an increase in seat capacity across other destinations, a seasonal recovery in demand and average ticket prices, the receipt of war-related support grants from the Ministry of Finance, and improved income from subsidiaries (which generated $78 million in revenue this half-year).
The company has set a target for 2027: 3 million passengers and $1 billion in revenue.
The central milestone for Israir in the coming months will be the opening of the New York route. The company has already received an expanded operating license from the Civil Aviation Authority and approval from the US Department of Transportation to begin selling tickets. Sales are expected to commence next week. The company is currently in the final stages of submitting the documentation required to receive a flight operation permit from the US Federal Aviation Administration (FAA).
