JERUSALEM: El Al Israel Airlines on Tuesday reported an 8% rise in quarterly profit as it continued to benefit from foreign airlines holding off on flying to Israel due to the Gaza war, but said it expected more to return to the market next year.

Some foreign carriers resumed flights in August and others said they would restart flights to Israel in the wake of a U.S.-brokered ceasefire deal between Israel and Palestinian militant group Hamas in Gaza last month.

"Starting in the fourth quarter, we see a recovery trend at Ben Gurion Airport with the return of foreign airlines, which we estimate will continue gradually throughout 2026," El Al CEO Dina Ben Tal Ganancia said.

Israel's flag carrier said on Tuesday it earned $203 million in the third quarter, up from $187 million a year earlier. Revenue rose 7% to $1.07 billion. Its shares were up 3.4% in afternoon trading in Tel Aviv.

Ben Tal Ganancia said the quarter had been affected by the security situation, with demand for El Al flights high during the summer while few foreign planes were flying from Ben Gurion Airport near Tel Aviv.

After October 7, 2023, when Hamas militants raided Israel, many foreign carriers halted flights to Tel Aviv, leaving El Al as one of a handful of airlines to fly to and from Israel for much of the past two years.

That led to a fivefold jump in net profit for El Al in 2024, with some customers complaining the airline was taking advantage of the war to push up airfares.

Ben Tal Ganancia said El Al's strong financial position and high liquidity would anchor future growth.

Passenger traffic at Ben Gurion rose 65% in October over October 2024, while El Al's market share slipped to 31% from 50%, according to Israel Airports Authority data.

El Al increased seat capacity in the quarter with the addition of a 17th Boeing 787 Dreamliner and returning an older Boeing 777 back into service. Its load factor - the proportion of available seats filled - rose to 95.3% from 93.9% a year ago.

Ben Tal Ganancia will be stepping down in early 2026 and will be replaced by Levy Halevy. (Reporting by Steven Scheer; Editing by Jan Harvey)