Israir CEO Defends Long-Term Growth Potential Amid Short-Term Stock Volatility
Israir CEO Uri Sirkis remains optimistic despite a 20% stock drop over the past year, pointing to strategic growth engines, fleet expansion, and its lucrative Cyprus maintenance center.
While El Al celebrates its historic entry into the TA-35 index following a year of sharp surges, Israir Group is presenting a complex picture in the capital market. Over the past year, Israir's stock has declined by about 20% (and roughly 8% since the beginning of the year), currently trading at a market capitalization of approximately 420-425 million shekels. This current drop follows two exceptionally strong years (2023–2024) that saw sharp stock rallies, creating a striking gap between it and its larger competitor.
Growth Engines and Long-Term Potential
However, despite short-term downward pressure on the stock and market volatility, Uri Sirkis, CEO of Israir Airlines—owned by businessman Rami Levy—presents an optimistic and resolute stance. In a conversation with Globes aviation correspondent Alon Perl during the Investment Generation Festival held by the financial house, Sirkis made it clear that he is convinced of the company's long-term appreciation potential: "Investors love short-term profits, but if you look at the growth engines Israir has developed, its chances of doubling itself are greater than El Al's chances of doubling itself."
According to Sirkis, in recent years Israir has invested extensive resources in establishing several strategic growth engines. These include expanding the aircraft fleet, entering the long-haul flight arena, acquiring hotels, and expanding the aircraft maintenance arm in Cyprus. The company estimates that the combination of these moves will allow it to reach a volume of about 3 million passengers next year, thanks in part to increasing the number of takeoff and landing slots it holds at Ben Gurion Airport.
Maintenance Center and Financial Challenges
One of the central assets emphasized by Sirkis is the aircraft maintenance center in Larnaca, acquired for approximately 8 million dollars. The center has expanded significantly and now provides maintenance services to leading foreign airlines, most notably easyJet.
"We signed an agreement worth 100 million euros," Sirkis noted, adding that in his estimation, this is a business whose estimated value stands at about 40 million dollars—a value that he claims is not currently fully reflected in the stock price and the company's market value on the exchange.
Alongside the growth story, Sirkis does not ignore the economic weights burdening the company's results. At the center of the challenges lies the rise in jet fuel prices, which at current price levels impacts Israir's bottom line by an estimated 30 to 40 million dollars annually. To cope with the erosion in profitability, Israir implemented an internal streamlining move that included cutting about 5% of its workforce.
Regarding flight prices for sought-after routes to the United States, Sirkis estimated that a ticket price of about 1,200 dollars is a logical price under current conditions. However, he noted that under normal market conditions and regular fuel prices, it would be possible to reach a price level of about 900 dollars. He added that had other companies not entered these routes, ticket prices could have skyrocketed to the neighborhood of 1,800 dollars.
