Israir admits $10.4mln Q2 loss as war on Iran halted flights
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Israir reported a $10.4 million Q2 loss after suspending flights during the war on Iran, despite higher revenues and record passenger growth from fleet expansion.
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A row of 10 aircraft belonging to Israeli airlines El Al, Arkia, and Israir, as well as a single passenger jet belonging to TUI Airways, sit parked in a row along the apron of Cyprus' main airport in Larnaca, Saturday, June 14, 2025. (AP)
Israeli airline Israir reported a net loss of $10.4 million in the second quarter of 2025, citing the suspension of flights during the recent war on Iran, according to Calcalist. The result marks a sharp reversal from the $7 million profit recorded in the same quarter last year.
The airline, owned by businessman Rami Levy, said the impact of the war reduced profit by 7.5 million shekels. In addition, financing expenses surged to $7.4 million, further weighing on earnings.
Despite the losses, Israir’s revenue rose 54% year-on-year to $137 million, driven in part by an increase in flight activity. However, costs rose almost as sharply, climbing 46% to $126.7 million.
The company attributed the higher expenses to expanded use of wet-leased aircraft as part of preparations for the summer and holiday season, alongside a steep rise in jet fuel purchases.
Record cash flow and passenger growth
Israir reported record operating cash flow of $56 million in the first half of 2025, up 56% from the same period in 2024. Passenger numbers rose 46% to 440,000 in the quarter, despite the estimated loss of 70,000 passengers due to the suspension of flights during the war.
The airline noted that a reduction in foreign carriers’ flights, combined with its expanded fleet, supported the increase in passenger traffic.
Economy shrank by 3.5%
Israeli Channel 13, citing data from the Central Bureau of Statistics, reported last week that the "Israeli economy contracted by 3.5% in the second quarter of 2025, its first decline since the outbreak of the war.
Analysts attribute the downturn directly to the war on Iran, which has severely impacted economic indicators.
The report highlighted that the war with Iran has weighed heavily on growth. Earlier, Israeli newspaper Maariv revealed that "Israel" lost tens of billions of shekels due to the 12-day war, estimating damage to GDP at around 52 billion shekels (over $14 billion).
Even with partial recovery efforts, at least 26 billion shekels ($7 billion), or 1.3% of GDP, is considered permanent economic damage.
Mounting costs of the Gaza war
In addition to the Iran-related losses, "Israeli" media reported that the economic cost of the war on the Gaza Strip has reached nearly 300 billion shekels (about $81 billion). Some estimates suggest the real figure has already exceeded this amount.
Shaul Amsterdamski, an economic commentator for Kan TV, noted internal debates within the Finance Ministry over the scale of the losses, stressing that much of the cost stems from ongoing military operations.
Maxim Ribnikov, director at Standard & Poor’s Global Ratings, ruled out any upgrade to "Israel’s" credit rating until the Gaza war ends, citing its economic and financial toll.
