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Author Topic: Business Update from Al El Israel Airlines  (Read 21 times)

Offline tomnieuw

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Business Update from Al El Israel Airlines
« on: April 05, 2021, 05:11:04 PM »
Tel Aviv, Israel  |  February 6, 1989

Memo from Tomniew, CEO and founder of Al El Israel Airlines to all staff and shareholders:

Dear Al El family,

Exactly 6 months ago today, we embarked on one of our most challenging journeys in the history of Al El Israel Airlines when we initiated our business recovery plan Blue Sky. Our financial situation had never been as critical, and without the measures we implemented our airline would not have survived. Having said that, I bring excellent news today, and I couldn't be more proud and excited than I am today! Being part of Al El is truly something special, and each and every single one of you have demonstrated that through your perseverance and dedication. Below is a business update as of February 1st:

Financial Statement
For the full year 1987, the business recorded a massive loss of negative $35.7 million. Operating revenues for the full year was $87.6 million.
Year over year, we improved the results for 1988, and recorded a positive profit of $11.4 million with record breaking revenues totaling $308.7 million.
For the current year, we forecast a profitability of 10% of operating revenues, an increase of more than 7%.
 
Fleet Update
The significant improvement in our financial results allow us to invest further in our fleet:
- Boeing 747 fleet
-> New First Class and Business Class product installed on all 8 Boeing 747SP aircraft ($35 million investment)
-> Lease extension for up to 7 years results in 25% savings on leasing costs
-> Signed memorandum of understanding to lease an additional 6 Boeing 747SP to join the fleet this year
- Airbus A300 fleet
-> Despite earlier announcement, we are exploring options to extend the lease on both Airbus A300 aircraft
-> Better market economics allow to deploy this sub-fleet on high demand medium and short haul routes
-> Both Airbus A300 generate approximately $1.6 million in profits every month
- Fleet expansion: new Boeing 727
-> Signed agreement to lease 15 Boeing 727, with options for a further 35 aircraft to join the fleet
-> Boeing 727 will operate short and medium haul flights in a 2-class configuration
-> First 2 aircraft join the fleet this week

Network Planning
- Network performing solid with all flights recording over 76% load factor
- First and Business Class on long haul flights performing at a much higher level than last year
- New destinations throughout Europe, Asia and Middle East launch this week with the arrival of the Boeing 727
- Additional daily rotation to New York JFK (3 daily) and a second daily flight to Newark to be added over the summer
- Further focus on cargo capacity and offerings (currently only 8% of capacity)

Corporate Structure
- Al El Group will be established by July to serve as holding company
- Al El Israel Airlines will become a separate aviation entity of the Al El group
- Al El Handling becomes separate entity for ground devision
- Al El Catering joins holding company as stand alone catering business
- Al El Technics to offer aviation technical services as stand alone company under Al El Group
- Al El Cargo initially absorbed by Al El Handling, forecasted to become stand alone entity by end of next year

Team Member updates
- Hiring freeze discontinued, we are hiring new positions again
- Every employee receives retroactive pay for the past year with February payroll
- Every employee receives one-time bonus of 50% as a token of appreciation for the hard work and the concessions made


While we are not 'out of the woods' yet, our future looks bright again and we are pleased to go full speed ahead. Our new corporate structure and our enhanced product and network with the addition of new aircraft are the signs of our confidence about the future. Thanks to your sacrifices, we were able to return to profitability in half the time we had originally projected, and we are ever so happy to be able to repay you just like we promised we would. Thank you for helping Al El take off into Blue Sky! You're the reason we fly ❤️

For questions, please contact your supervisor or your HR business partner.

Yours truly,

Tomnieuw
CEO & President
Al El Group
« Last Edit: April 05, 2021, 05:15:45 PM by tomnieuw »

 

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