El Al Stock Soars After Flydubai Incident, Nearing Prestigious Index Entry

Following a recent attempted terror attack on a Flydubai flight, El Al's stock experienced a two-day surge of 13%, reaching a record high valuation of 11.5 billion shekels. Investors anticipate a renewed surge in demand for flights with the Israeli airline, extending a three-year period of exceptional growth during which its value increased by over 450%. This optimism stems from the belief that Israelis will prefer flying with domestic carriers over foreign airlines, particularly those from Gulf states, due to security concerns. Local airlines have reportedly gained renewed approval to fly to the Gulf following the incident. El Al's market share and ticket prices significantly increased during the Iron Swords War as foreign airlines canceled or postponed flights to Israel. The airline's strong financial performance includes a cumulative profit of $1.04 billion from the start of the war until mid-2026. In the second quarter of the current year, El Al reported a 103% increase in net profit compared to the same period last year, reaching $126 million. This stock surge positions El Al for potential entry into the Tel Aviv 35 index, the stock exchange's flagship index, for the first time. The airline, which rejoined the TA 125 and TA 90 indices in 2024, is now a strong contender for inclusion in the TA 35, competing with renewable energy companies Doral and Energix. The entry into the index depends not only on El Al's stock performance but also on the number of stocks exiting the index, with Damri, Shufersal, and Cannon potentially being removed. Additionally, one fewer stock will be added than removed due to the recent fast-track inclusion of cyber giant Palo Alto Networks, bringing the index's total to 36. The primary beneficiaries of El Al's stock surge are its controlling owners, Keni and Eli Rosenberg. They acquired control of the company six years ago when it was near collapse due to the COVID-19 pandemic. Their investment of 840 million shekels has since grown to over 4.6 billion shekels. El Al also resumed dividend payments this year, with the owners receiving 150 million shekels, resulting in nearly 4 billion shekels in paper profits for the Rosenberg family.

Another potential beneficiary is Isracard, which markets El Al's frequent flyer program credit cards. Isracard's marketing strategy emphasizes the benefits of flying with El Al, a message that aligns with the increased security concerns following the Flydubai incident. However, neither El Al nor Isracard have confirmed an increase in bookings since the event.