Israir CEO Sees Greater Growth Potential Than El Al
Translated & summarized from Globes by baba
Israir CEO Uri Sircus believes his company has greater growth potential than El Al due to strategic investments in fleet expansion, long-haul routes, and aircraft maintenance. The company is focusing on its Larnaca maintenance center, which secured a 100 million euro deal, and aims for 3 million passengers next year. Sircus addressed challenges like rising fuel costs, which led to a 5% workforce reduction, and enhanced security checks for foreign staff following Flydubai's exit. He expects flights to Dubai to resume around Hanukkah and anticipates industry changes will affect future performance and ticket prices.
The story in 6 lines · by baba
- Israir CEO Uri Sircus believes his company's growth potential exceeds that of El Al.
- Israir is investing in fleet expansion, long-haul routes, and its Cyprus maintenance center.
- The Larnaca maintenance center secured a 100 million euro agreement and is valued at $40 million.
- Rising jet fuel costs impact Israir by $30-40 million annually, leading to a 5% staff reduction.
- Israir enhanced security checks for foreign staff after Flydubai ceased operations in Israel.
- Flights to Dubai are expected to resume around Hanukkah, according to Sircus.
Uri Sircus, CEO of Israir, expressed confidence that his company has greater growth potential than its competitor El Al, despite El Al's stock performance in the past year. Speaking at the "Generation of Investments" festival, Sircus stated that while investors favor short-term gains, Israir's developed growth engines position it for significant future expansion. He highlighted Israir's investments in expanding its aircraft fleet, entering long-haul routes, acquiring hotels, and broadening aircraft maintenance operations in Cyprus.
A key growth driver identified by Sircus is Israir's aircraft maintenance center in Larnaca, Cyprus. Acquired for approximately $8 million, the center has expanded and now services airlines like EasyJet. Sircus announced a new agreement worth 100 million euros with the center, which he estimates is worth about $40 million and is not fully reflected in the company's current valuation. An investor tour of the facility is planned for November 10.
Sircus also addressed challenges, including the rising cost of jet fuel, which he estimates costs the company $30-40 million annually. In response, Israir implemented an efficiency measure, reducing its workforce by about 5%. Regarding competition on routes to the United States, he deemed a $1,200 ticket price reasonable under current conditions, but suggested $900 would be achievable with normal fuel prices. He also noted that without new entrants, prices could have reached $1,800.
On the topic of Flydubai ceasing operations in Israel, Sircus stated it does not benefit Israir and expressed concern for regional stability. However, he believes the event strengthens Israeli airlines and Israir's brand, while also exposing a vulnerability in security checks for foreign aircrews. Israir now conducts individual checks on all its foreign staff, including online open-source intelligence gathering, a process that has incurred significant costs and led to sharpened procedures.
Sircus anticipates flights to Dubai will resume around Hanukkah, suggesting some countries are hesitant to resume operations in Israel before elections due to potential misuse for campaign propaganda. He concluded by predicting that changes in the Israeli aviation sector will impact both company performance and ticket prices for the public in the coming years.
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