Eli Rozenberg, the son of businessman Kenny Rozenberg, who through his son hold the controlling stake in El Al Israel Airlines Ltd. (TASE:ELAL), has converted 10% of his options in the airline into shares. The exercise price of the options is NIS 2.10 per share, while the share price opened on Sunday at NIS 8.55 per share, four times the exercise price. “On paper” Rozenberg has made a NIS 90 million profit by exercising the options.
Rozenberg had about 140 million options (Series 2) on the eve of exercising some of them, which means that he has a potential further profit of almost another NIS 800 million “on paper.” After exercising the options, he holds 49.5% of El Al shares worth almost NIS 2 billion, more than double the value of his investment in the company.
El Al share price fell 5.8% last Thursday amid investor expectations that a ceasefire in Gaza would lead to the return of foreign airlines to Israel (several airlines did indeed announce this last week). Increased competition on flights abroad, if it does occur, is expected to lead to an erosion of the exceptional profitability that El Al achieved last year.
A rise of almost 150% over the past year
The share price of El Al, managed by CEO Dina Ben-Tal Ganancia, jumped almost 150% over the past year and is up 7.8% since the start of 2025. The market believes that the delay in the return of foreign airlines to Israel is having a positive effect on El Al, especially on the profitable routes to the US, where El Al currently enjoys a 90% market share, and these are routes where fares are very expensive.
El Al estimated in its third-quarter 2024 report that fourth quarter results would be very good, if less so than the third quarter, in which the company once again broke all records, with a profit of $187 million on revenue of more than $1 billion.
In October-November 2024, El Al increased its market share at Ben-Gurion Airport and was responsible for flying over 50% of passengers.
Horizon Capital Markets CEO Itay Lipkovitz told “Globes” last week, “Even if foreign airlines start to return in April, it will happen gradually and this means that the results of the first quarter will also be very strong, and in the second quarter too. We must remember that the global aviation market is currently very strong, there is a shortage, demand exceeds supply, capacity is full and everyone has work. This can also be seen in the great reports published by US airline Delta. If the market were weak, foreign airlines would have returned to Israel a long time ago.”
Published by Globes, Israel business news – en.globes.co.il – on January 19, 2025.
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