EL AL Israel Airlines presented today its financial results for the third quarter of 2016 and the first nine months of the year.

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1 November 22, 2016 EL AL Israel Airlines presented today its financial results for the third quarter of 2016 and the first nine months of the year. The Company's revenues in the third quarter of 2016 amounted to approx. USD 644 million, compared to approx. USD 647 million in the third quarter of the previous year; Gross profit in the third quarter of 2016 amounted to approx. USD 173 million, compared to approx. USD 209 million in the third quarter of the previous year; Profit before tax in the third quarter of 2016 totaled approx. USD 93 million, compared to a profit of approx. USD 126 million in the third quarter of last year; Net profit in the third quarter of 2016 totaled approx. USD 70 million compared to a profit of approx. USD 93 million in the third quarter of last year; The EBITDA amounted to approx. USD 142 million, compared to approx. USD 173 million in the third quarter of last year; The EBITDAR amounted to approx. USD 180 million, compared to approx. USD 193 million in the third quarter of last year; The Company's cash and deposit balances as of September 30, 2016 totaled approx. USD 219 million; The number of passenger segments in the third quarter of 2016 increased by about 13% compared to last year; The Company's seat availability increased by about 7.5% and RPK increased by about 8%; The Company's market-share of passenger traffic at Ben-Gurion Airport increased in the third quarter of 2016 to approx. 31.5%, indicating a growth of about 5% compared to approx. the third quarter of the previous year. Load factor in the third quarter stood at approx. 87.3%, compared to 87% in the third quarter of last year;

2 The Company's revenues in the first nine months of 2016 amounted to approx. USD 1,578 million, similar to the previous year; Gross profit in the first nine months of 2016 amounted to approx. USD 322 million, compared to approx. USD 364 million in the first nine months of the previous year; Profit before tax totaled in the first nine months of 2016 approx. USD 106 million, compared to a profit of approx. USD 128 million in the first nine months of last year; Net profit totaled in the first nine months of 2016 approx. USD 83 million, compared to approx. USD 94 million in the first nine months of last year. ******* David Maimon, EL AL's CEO: "The Company presented today a net profit of approx. USD 70 million and a growth in all operational parameters, including an increase of about 13% in passenger segments, a market-share increase to 31.5% and a load-factor increase to a level of 87.3%. In the third quarter of 2016 we presented revenues similar to the third quarter of last year, notwithstanding the challenging competition and the drop in flight ticket prices. The third quarter was affected by the pilots' sanctions, which have been continuing for many months, causing disruptions in EL AL's operations. Said disruptions are expressed, inter alia, by delays and cancellations of departing flights. During the period of this report, the company was further compelled to lease aircrafts, a move that affected the Company's expenses, in order to avoid cancellation of flights due to the continued sanctions. We are committed to ensure the Company's success and prosperity, which is the source of livelihood of thousands of households from the family of EL AL, and are determined to do the utmost to bring the Company back to normal operations, and above all, restore the trust of our customers".

3 Dganit Palti, El Al's CFO, stated: "We completed the third quarter of 2016 with revenues similar to the third quarter of last year, due to a significant increase in the number of passengers, notwithstanding the increased competition and the continued trend of decrease in flight ticket prices. Operating results increased, despite a saving of USD 23 million in fuel expenses (about 17%). The growth in expenditure was mainly affected by an increase in operations and disruptions in manning flights as well as the need to find alternative solutions. EBITDA in this quarter totaled approx. USD 142 million and the Company's cash and deposit balances total approx. USD 219 million. ******* Main Data for the Nine and Three-Month Periods Ended September 30 (in USD millions) January - September July - September Change Change Operating revenues 1,578 1,578 (0%) (1%) Operating expenses (1,246) (1,214) 3% (470) (438) 7% Gross profit (9%) (17%) EBITDA (7%) (18%) Profit before income tax (17%) (27%) Profit for the period (12%) (25%)

4 Profit and Loss Results for the Three-Month Period Ended on September 30, 2016: 1. Operating revenues operating revenues decreased in the reported period by approx. USD 3 million (about 0.6%) compared to the third quarter of the previous year, with a drop of approx. 1.3% in passenger flights. Revenues were affected by two opposing trends the continued trend of decrease in flight ticket prices due to the intensified competition and the impact of the drop in fuel prices, and on the other hand, a significant increase occurred in the number of passengers carried by the Company and in passenger revenue per kilometer (RPK), as a result of an increase in operations. In the Cargo Segment, the Company's revenues decreased by approx. 4.2%, mainly due to a drop in the yield of Ton-Kilometer, offset by an increase in the amount of Ton- Kilometer flown. 2. Operating expenses operating expenses increased in the reported period by approx. USD 32 million (about 7.3%) compared to the third quarter of the previous year, after a saving of USD 23 million in jet fuel expenses. This growth mainly results from an increase in operations, disruptions in manning flights (which began in October 2015 and continue until the publication of the Report) and the need to find alternative solutions in connection therewith, as well as due to an increase in depreciation expenses, mostly due to an increase in the number of the company's aircrafts. 3. Jet Fuel Expenses the Company's jet fuel expenses, including hedging impact, declined by approx. 23.4% (about 17%) compared to the corresponding expenditure of the previous year, as a result of a significant drop in the price of jet fuel, offset in part by an increase in the amount of jet fuel consumed due to the growth in the scope of the Company's operations (about 9% growth in flight hours). 4. Selling Expenses no significant change occurred in selling expenses and general and administrative expenses compared to the third quarter of the previous year. 5. Financing Expenses net financing expenses amounted to approx. USD 6.4 million, compared to approx. USD 6.5 million in the third quarter last year, along with a moderate growth in interest expenses as a result of an increase in the Company's debts, offset by income from price differences. 6. Profit for the Period profit before tax in the reported quarter totaled approx. USD 93 million, profit after tax totaled approx. USD 70 million, constituting about 11 % of the turnover, compared to profit before tax of approx. USD million in the third quarter of last year and profit after tax approx. USD 93.0 million, constituting about 14.4% of the turnover. The change in profit is mainly attributed to the increase in operating expenses. 7. Cash flows from operating activities in the third quarter of 2016, the Company generated positive cash flows from operating activities of about USD 22 million, compared to positive cash flows from operating activities of about USD 108 million in the third quarter of last year. This decrease mainly resulted from a drop in the Company's profit before tax, as explained above, in a total amount of USD 33.8 million (the Company's tax expenses are not cash flows), as well as, materially, from a number of other factors related to the timing of certain payments and receipts, as provided below:

5 A payment of about USD 18 million for renovation of leased engines. Since the Company pays the lessor maintenance reserve on an ongoing basis over the lease term, it is expected to collect the said amount in subsequent periods from the maintenance reserve. September 2016 salary totaling about USD 15 million was paid to the employees in September 2016 in lieu of October 2016, due to the timing of the Holidays. Timing differences totaling about USD 16 million in respect of ongoing cash flow account settlement with the Ministry of Defense. It should be clarified that, the timing differences are a one-time event and do not indicate the Company's cash generation capacity from its operating activities. Profit and Loss Results for the Nine-Month Period Ended on September 30, 2016: 1. Operating revenues remained unchanged in the reported period compared to the first nine months of the previous year, with a growth of approx. USD 11.9 million (about 0.8%) in passenger flights and a drop of approx. USD 12.3 million (about 9.6%) in the cargo segment. The passenger segment reported an increase in operations which resulted in an increase in revenues, mostly offset by the impact of the continued trend of drop in flight ticket prices, in view of the decrease in fuel prices and the intensified competition. In addition, the Company's revenues during this period were adversely affected by the erosion of exchange rates of currencies in which the sales transactions of the Company are made, in relation to the dollar. 2. Operating expenses increased in the reported period by approx. USD 32 million (about 2.7%) compared to the first nine months of the previous year, following a saving of about USD 85 million in the Company's jet fuel expenses. The gross increase of approx. USD 117 million mainly results from an increase in operations, disruptions in manning flights (which began in October 2015 and continue until the publication of the Report) and the need to find alternative solutions in connection therewith, as well as due to an increase in depreciation expenses, which is mainly the result of an increase in the number of the company's aircrafts. 3. Profit for the Period profit before tax in the reported period amounted to approx. USD 106 million, and profit after tax amounted to approx. 83 million, constituting about 5.3 % of the turnover compared to profit before tax of approx. USD million in the same period last year and profit after tax of approx. USD 94.3 million, constituting about 6.0% of the turnover. The change in profit is mainly attributed to an increase in operating expenses, Balance Sheet Data as of September 30, 2016: 1. Current Assets - amounted to approx. USD million, reflecting a growth of approx. USD 77.0 million compared to December 31, This growth mostly resulted from an increase in cash balances compared to the cash balances at the end of 2015 (see cash flow analysis below), due to a seasonal increase in the Customer item and an increase in the Receivables item. 2. Current Liabilities - amounted to approx. USD million, with no significant change compared to December 31, This is due, on the one hand, to a seasonal increase in the

6 Revenues item from pre-sale of airline tickets, offset by a decrease in the Derivative Financial Instruments item and a decline in the Employee Liabilities item due to early payment of September salary as explained above. 3. Working Capital the Company has a working capital deficit of approx. USD million compared to a deficit of approx. USD dollar as of December 31, It shall be noted that a substantial part of the working capital deficit does not reflect short-term cash flows, as hereinafter explained. The Company's current ratio as of September 30, 2016 rose to approx. 56% compared to 46.8% as of December 31, The working capital deficit as of September 30, 2016 consists of two substantial components which are included in the Company's Current Liabilities items and are characterized by current business cycle; however, the Company is not required to use cash-flow sources in the short term in order to repay these components: prepaid revenue from the sale of airline tickets and from the Frequent Flyer Club, to be settled by providing future flight services, and liabilities to employees for vacation, which are expected to be paid over several years but classified as a short-term liability in accordance with accounting principles. Moreover, loans in an aggregate amount of about USD 78 million, the original maturity date of which is in April and July 2017, are expected to be settled over a period of 4 years, therefore they will be classified starting from the execution of the long-term agreement. It shall be noted that the working capital is affected, inter alia, by the seasonality of operations. 4. Non-Current Assets amounted to approx. USD 1,274.6 million, showing a growth of approx. USD 4.8 million compared to their balance as of December 31, 2015, mainly as a result of receiving three aircraft, less current depreciation. 5. Non-Current Liabilities - totaled approx. USD million, similar to their balance as of December 31, Said increase resulted mostly from loan balances, offset in part as a result of the increase in deferred tax liabilities, mainly from the profit before tax for the period (offset by the impact of the decrease in corporate tax) as well as the improvement in the fair value of jet fuel derivatives, which in accounting terms were designed to serve as hedging instruments. 6. Equity amounted to approx. USD million. The growth of approx. USD 84.3 million compared to equity as of December 31, 2015, mainly resulted from the profit for the period and the impact of the Company's hedging instruments on the equity funds, in a net-of-tax amount of approx. USD 39.2 million, offset by the impact of liabilities for employee benefits on the equity funds, in a net-of-tax amount of approx. USD 5.4 million. Additionally, the equity increase was partially offset by a dividend of approx. USD 33.4 million, which was declared and paid during the period. It shall be clarified that this notice does not replace reading the financial statements of the Company as of September 30, 2016

7 About El Al El Al Israel Airlines Ltd. is the National Air Carrier of Israel. In 2015, El Al recorded revenues amounting to nearly USD 2.1 billion. El Al carries about 5 million passengers a year. The Company operates flights to about 34 direct destinations around the world and many other destinations by means of cooperation agreements with other airlines, thus it currently operates 43 aircrafts, 28 of which are owned by the Company. ( Details of Conference Call A conference call took place on Wednesday, November 22, 2016, at 15:30 to review the results. Persons interested in participating in the conference call are invited to call: A recording of the conference call will be available to those interested starting from November 22, 2016, at 17:00, until November 29, 2016, via phone number , as well as on the Company's Investor Relations website at: starting from November 23, For further details: Dafna Cohen Head of Group Business Control and Investor Relations El Al Israel Airlines Ltd dafnac@elal.co.il Amir Eisenberg CEO Eisenberg-Eliash Ltd amir@pr-ir.co.il