El Al Israel Airlines (ELAL.TA) is expected to make a long-awaited decision on an order of around 30 short-haul aircraft in “a few weeks”, Chief Financial Officer Yancale Shahar said this week.
Israel’s flag carrier will decide between the Boeing (BA.N) 737Max and Airbus (AIR.PA) A320 family in what could a deal worth $2 billion, he said.
“We are at the last mile,” Shahar told Reuters after an El Al news conference to announce its first-quarter financial results.
Since its inception in 1948, El Al has maintained an all-Boeing fleet, owing to Israel’s close ties with chief ally the United States, but Shahar said it was still possible the airline would shift to Airbus, acknowledging that both firms’ product lines have had their problems.
“At the end of the day, you have to find the right asset for the company and the price that will make sense,” he said. “It’s finance. It’s economics.”
Last August, El Al said it was in “serious” talks with Airbus to buy as many as 30 A321neo jets, in what would be an historic change of supplier as it looks to replace its aging short-haul fleet. Since then officials have said both Boeing and Airbus have made aggressive proposals.
El Al, which posted a first-quarter net profit of $80.5 million versus a year-before $34.4 million loss on revenue of $738 million, plans to replace its fleet of 24 Boeing 737-800s – which have an average age of 20 years – and 737-900s, while possibly buying another six. The purchases would be made in tranches.
Shahar noted that making a decision now was challenging, since severe backlogs at both planemakers meant deliveries would be years away. “You have to make a decision according to a market that will be completely different,” he said.