El Al's "Frequent Flyer" Club Generates Significant Profits
Translated & summarized from Globes by baba
El Al's "Frequent Flyer" club reported a net profit of $50 million for the first nine months of the year, with net revenues reaching $117 million. The club has nearly 3.8 million members and has partnered with Isracard for its "Flycard" credit cards, which is exceeding expectations. El Al is publishing the club's financials separately for transparency.
The story in 5 lines · by baba
- El Al's "Frequent Flyer" club earned $50 million in net profit from January to September.
- The club's net revenues increased 61% to $117 million in the first nine months.
- Nearly 3.8 million members are part of the "Frequent Flyer" program as of September.
- A new partnership with Isracard for "Flycard" credit cards is exceeding El Al's projections.
- The club's profitability is expected to increase by $100-130 million annually due to the Isracard deal.
El Al has revealed substantial financial data for its "Frequent Flyer" club, highlighting its profitability. The club, established in January 2022 and operational since July of that year, manages El Al's loyalty program. It allows members to accumulate and redeem points for various services, primarily in aviation and tourism, and also engages in credit card partnerships.
For the first nine months of the year, the club reported net revenues of $117 million, a 61% increase compared to the same period last year. The net profit for this period reached $50 million, representing approximately 42% of net revenues after accounting for points redeemed for flights and other benefits. This profit level is comparable to the previous year's earnings.
As of the end of September, the "Frequent Flyer" club boasts nearly 3.8 million members, with 570,000 credit cards issued to them. The number of members grew by about 9% year-over-year, while the number of credit cards saw a more significant increase of 14%.
El Al recently partnered with Isracard to issue its "Flycard" credit cards, replacing Cal. Isracard has already issued approximately 373,000 "Flycards," exceeding El Al's initial projections. The airline anticipates this partnership will contribute an additional $100 to $130 million annually to its profits before taxes, even with a temporary decrease in card numbers during the transition from Cal.
El Al decided to publish the club's financial reports separately to provide transparency to its stakeholders, mirroring disclosures made by a minority shareholder in the club. The company noted that consolidated financial statements differ from the club's standalone results due to accounting adjustments, including the neutralization of inter-company transactions.
