Israel-based El Al has confirmed that it is currently in talks with Airbus about a potential A321neo order, with the final decision to be made during 2024.
In an interview with Reuters, the airline’s Chief Executive Officer (CEO) Ben Tal Ganancia said that the negotiations with Airbus were “serious” and that the Israeli carrier is having discussions with both Airbus and Boeing over a potential narrow-body aircraft order.
“They are coming back and forth to Israel to show us their business cases and we are examining them,” Ganancia added.
The executive’s statement confirms what the airline said during its Q1 2023 financial results presentation in May 2023, namely that El Al wants to expand and renew its fleet starting by 2025. The carrier sent a Request for Proposals (RFP) to Airbus, Boeing, and engine manufacturers over its next-generation single-aisle jets.
In its Q2 2023 financial update presentation, El Al outlined its plans to grow its narrow-body fleet to between 28 and 31 aircraft by 2028, including the introduction of next-generation aircraft like the A321neo. Its Boeing 787 fleet is scheduled to grow to 22 aircraft by 2028, according to the airline’s estimates.
Currently, the airline operates a total of 46 aircraft: 16 Boeing 737-800s, eight 737-900ERs, six 777-200ERs, four 787-8s, and 12 787-9s.
However, its Boeing 737s are aging, with the average age of the 737-800 and 737-900ER being 18.9 and 8.6 years, respectively. Replacing them would help the airline to reduce direct and indirect operating costs, such as fuel and airport-related expenses.
Acquiring them on short notice would be difficult, though, as both manufacturers are sold out for several years in advance. On the other hand, turning to aircraft leasing companies that hold earlier delivery slots could help El Al get access to newer aircraft.
The airline achieved its first operating profit since 2005 in Q1 2023, continuing that profitable run with a positive result of $90 million in Q2 2023.