El Al SWOT analysis: challenges remain for Israel's national airline

A CAPA analysis report on El Al in Apr-2014 identified a number of challenges facing the Israeli national airline: an ageing fleet, stagnant traffic growth, falling market share, a high cost structure, growing competition from European LCCs and network carriers, and a weak financial track record.

The introduction of an EU-Israel open skies agreement between 2013 and 2018 stimulated competition and stoked growth in the market for air travel to/from Israel. Growth is also supported by Israel's above average levels of GDP per capita. The market has tourist appeal and a strong business sector, and it is not surprising that it has attracted foreign airlines, LCCs in particular.

El Al has benefitted from Israeli market growth. It launched four new routes in 2019 and is planning four more in 2020. Unfortunately for El Al, however, the local competitors Israir Airlines and Arkia Israeli Airlines have grown much more rapidly. Moreover, foreign LCCs, led by Wizz Air, easyJet, Pegasus and Ryanair, continue to grow their share of seats to/from Israel.

This report considers El Al's strengths, weaknesses, opportunities and threats. The challenges faced by El Al six years ago are being addressed, but are still very visible.