El Al Stock Surges Amid War, Despite Concerns Over Pricing and Market Share

El Al Israel Airlines' stock price has risen 40% in the past month, reaching a market cap of NIS 4.3 billion. Despite concerns about shrinking market share after the war ends, investors believe the delay in the return of foreign airlines to Israel is benefiting El Al, particularly on US routes where it holds a 90% market share. The strong market and El Al's record-breaking third-quarter results are also contributing to the stock's rise.

El Al Israel Airlines (TASE: ELAL) has experienced a remarkable surge in its stock price over the past month, with a 40% increase that has brought its market capitalization to a impressive NIS 4.3 billion [1]. Despite concerns about shrinking market share once the ongoing conflict ends, investors remain optimistic about the airline's future prospects.

The delay in the return of foreign airlines to Israel is a significant factor contributing to El Al's market dominance. With a 90% market share on US routes, the airline enjoys a substantial competitive advantage [1]. The absence of major competitors on these lucrative routes allows El Al to maintain high airfares, which is a crucial factor in its financial success.

El Al's strong market position is further bolstered by its impressive third-quarter results. The airline reported a profit of $187 million on revenue exceeding $1 billion, breaking all of its previous records [1]. These results demonstrate El Al's resilience and adaptability in the face of challenging market conditions.

Moreover, the global market is currently experiencing a strong demand for air travel. Although US airlines such as American Airlines, Delta Airlines, and United Airlines have also experienced growth, El Al's market share at Ben Gurion Airport has risen to 50%, indicating that it is capturing a significant portion of this demand [1].

Looking ahead, investors anticipate that El Al's financial performance will continue to be robust. The airline's optimistic outlook for the fourth quarter of 2024 and the expectation of a strong first quarter in 2025 further support the belief that El Al's stock price will continue to rise [1].

In conclusion, El Al Israel Airlines' soaring stock price is a testament to its strong market position and resilient financial performance. Despite concerns about the impact of geopolitical tensions, the airline's dominant position on US routes and impressive third-quarter results make it a compelling investment opportunity.

References:
[1] "El Al stock keeps rising, even as war winds down." Globes, 13 January 2025, https://en.globes.co.il/en/article-el-al-stock-keeps-rising-even-as-war-winds-down-1001499231.