El Al's Frequent Flyer Club Drives Significant Profit Growth Amid Credit Card Partnership Shift

El Al Airlines reported strong financial results for the second quarter, with a net profit of approximately $126 million, doubling the profit from the same period last year. The airline's revenues surged 27% to $986 million, boosted by increased flights from Israel following Operation "Roaring Lion" and rising ticket prices. Alongside these results, El Al began publishing full financial reports for its subsidiary, the Frequent Flyer Club, which owns 75% of the club's operations.

The Frequent Flyer Club's revenues jumped 77% in Q2 to $41 million, with net profit rising 50% to $26.2 million. For the first half of the year, revenues reached $70.9 million, a 48% increase compared to the same period in 2025, and net profit grew 22% to $38.2 million, projecting an annual profit run rate of about $75 million. The club's net profit margin stands at 54%, comparable to successful high-tech companies rather than typical airline margins. In 2025, the club generated $93 million in revenue, a 39% increase from 2024, with net profit soaring over fivefold to $52.5 million.

Key growth drivers include a rise in the number of Frequent Flyer Club members to 3.68 million by mid-2026, an 8% increase year-over-year, and 514,000 holders of the Fly Card credit card. The club accounts for 58% of all El Al ticket purchases, up from 41% in 2023. Usage of the Fly Card has grown 30% over the past two years, outpacing the market growth rate of 8.5%. A new agreement signed in March 2026 with credit card company Isracard is expected to further boost the club's earnings over the next decade.

The insurance group Phoenix, which invested in the Frequent Flyer Club four years ago, recently exercised an option to increase its stake to 25%, valuing the club at approximately 2.88 billion shekels, more than double its 2022 valuation. Due to regulatory restrictions, Phoenix transferred some shares to its subsidiary Phoenix Gamma, which now fully reports the club's financials, prompting El Al to disclose these results.

Isracard, under the control of the Delek Group led by Yitzhak Tshuva, took over Fly Card operations from competitor Cal in early 2026. Although the transition is expected to reduce Isracard's short-term profits by 110-150 million shekels before tax in 2026, it is projected to add 160-170 million shekels annually before tax over the next ten years. El Al anticipates an annual profit increase of 100-130 million shekels from this new agreement. Customers are incentivized to switch to the new Isracard Fly Card with offers including free flights to European destinations and annual free tickets starting next year, while Cal cardholders will lose benefits after 2026.

These developments highlight the growing importance of El Al's Frequent Flyer Club and its credit card partnership as key contributors to the airline's profitability and growth strategy.