With Reuters

Israel's national carrier El Al Israel Airlines published its financial statements for the first time on Thursday. The airline said its net loss narrowed in the second quarter as cost-cutting measures offset a steep drop in the number of tourists visiting Israel.

The state-run airline said its net loss improved to $14.9 million in the second quarter from $32.5 million a year ago.

But second-quarter revenues slipped 9% to $242.2 million from $266.1 million in the parallel quarter.

For the first six months of the year, El Al posted a net loss of $28.5 million compared with a loss of $83.1 million in the first half of 2001.

The company prepared for increasing security costs by cutting back on its destinations and reducing its fleet of aircraft. That helped it increase cash flow from operations to $23.9 million, compared with $11.7 in the parallel quarter.

El Al said its bottom line was helped by a combination of cost-cutting measures that included layoffs and lower fuel prices.

"The company in the second quarter continues to show improved profitability despite the economic and geo-political situations, the sharp 39% drop in tourism and a 12 percent fall in the number of Israelis leaving the country," El Al chairman Michael Levy said in a statement.

Tourism to Israel has dropped sharply since the resumption of the intifada nearly two years ago. Less than one million tourists are expected to visit the country this year, which would be the lowest in well over a decade.