El Al's plans to buy 787s will allow fleet renewal, perhaps expansion. Hainan, Cathay to Tel Aviv?

El Al's plans to acquire 15 787s are an important, and overdue, step in its restructuring process. El Al cancelled a previous order for 10, and although a new order faced 2019 delivery slots at the earliest, El Al expects to receive its first 787 in 2017 and the last in 2020. The 787s will be used to replace El Al's six 747-400s and six 767-300ERs, both with an average fleet age of 20 years. The smaller but more numerous 787s replacing the larger 747s could indicate planned flat seat growth depending on the exact configuration.

Re-fleeting will not be a silver bullet to El Al, which after returning to profit in 2013 reported a loss in 2014. El Al improved its 1Q2015 loss while 2Q2015 showed profit growth - with low fuel prices clearly influential. El Al will need to make further adjustments, especially if it looks to grow with the 13 787s it expects to have on option in addition to the 15 firm orders. North America and Europe are El Al's core markets, but Asia is appealing with growing Chinese investment. Hainan Airlines had announced a Tel Aviv service for Sep-2015, but this appears delayed. Israeli reports meanwhile say Cathay Pacific could launch Tel Aviv service in mid-2016 with new A350s.