ISRAEL: Israir Group Bond Interest Rises to 5% After A330 Purchases Increase Leverage

TEL AVIV, Israel

• Israir Group bondholders have received 5% interest on series A bonds instead of the contracted 4.75% after the equity to net balance sheet ratio fell below 17%.
• The ratio breach stems from the purchase of two Airbus A330 aircraft for USD 85 million financed externally.
• The two A330-200s entered revenue service on the Tel Aviv-New York route after receiving all required approvals including from the Federal Aviation Administration (FAA).
• Israir Group posted H1 revenue of USD 250 million against USD 273 million in the prior year period.
• Passenger numbers fell to 640,000 from 825,000 year on year.
• The carrier recorded a net loss of USD 32 million in H1, of which USD 26 million is attributed to direct impact from the conflict with Iran.
• Jet fuel costs added USD 11 million to expenses while foreign exchange movements added a further USD 11 million.
• Israir Group expects the interest step-up to remain until the Q3 report is published.
• Recovery measures for H2 include approved Ministry of Finance grants of USD 4 million plus USD 4-8 million under negotiation, a joint loyalty club with Rami Levy projected to contribute USD 3-5 million, seasonal fare increases and two additional wet-leased aircraft.
• Israir Group targets 3 million passengers and USD 1 billion revenue in 2027, with the New York route expected to contribute 200,000 passengers.

Sources:

• Bizportal