QAS In 2026: Aviation Recovery Or A Business That Still Jumps With Ben Gurion

What This Follow-Up Is Testing

The main article's point was that Knafaim's value is shaped not only by the list of assets it owns, but by what can actually turn into reachable value. QAS is one of the most sensitive pieces in that equation. On one side, it is a business with meaningful market share, no external financial debt, and a proven ability to bounce back when activity at Ben Gurion improves. On the other, it is also a business whose economics react almost immediately to every shift in flight volume, in the mix of airlines operating at Ben Gurion, and in the company's ability to keep enough labor ready for the summer and holiday peaks.

That is exactly why 2026 matters. QAS already swung back into the black for Knafaim, contributing a profit of $1.338 million to Knafaim's share in results of investees in 2025 after a loss of $787 thousand in 2024. But that improvement does not mean the business is already back to normal. Revenue reached $41.9 million, up 75% versus 2024, and still down about 40% versus 2023. In other words, QAS is out of the 2024 hole, but it is not yet back to its pre-war economics.

Four points are worth holding from the start:

• The ground-handling authorization is no longer sitting on the edge of a cliff. On November 18, 2025, the Airports Authority extended it through the end of April 2028, removing the immediate licensing risk.
• The lounge win is real, but smaller than the old picture. QAS operated 5 lounges through the end of 2025, while the new authorization from January 2026 covers only 3 out of 5.
• QAS did regain market share. Its share in ground handling rose to about 48% in 2025 from about 35% in 2024, but that happened inside a market that still had not returned to pre-war volumes.
• The real bottleneck is labor. Headcount jumped from 304 at the end of 2024 to 715 at the end of 2025, to 847 at the end of February 2026, and then fell to just 162 by the end of March 2026 as activity stalled again.

The Longer Authorization Helps, But The Lounge Win Did Not Start From Full Scale

The good news is that the core business bought itself time. The ground-handling authorization, originally set to expire at the end of 2025, was extended to the end of April 2028. That matters because without that extension QAS would have entered 2026 with a partial operational recovery but a major regulatory question mark. The extension lowers the near-term risk and lets management focus on recovery rather than on a survival negotiation.

There is also a real achievement in the lounge tender. During 2025 QAS and Swissport won the authorization to operate 3 of the 5 lounges in Terminal 3, for 6 years starting in January 2026, with an option to extend for an aggregate period of up to 36 months. That gives the business a longer runway than the annual numbers suggest, and it ties the lounge operation to the same global partner already sitting in QAS's ownership and operations.

But this is exactly where it is easy to read the story too optimistically. Under the old model, through the Dan lounge partnership, QAS operated all 5 lounges until the end of 2025. Under the new model, it entered 2026 with only 3 lounges. So this is an upgrade in authorization quality, not an automatic increase in operating scale. On top of that, at the end of February 2026 only one of the three lounges was actually operating, because the new tender included an initial renovation and organization period. Since the conflict with Iran began, all lounge employees have been on unpaid leave.

This chart matters because it breaks a common illusion. The headline on the tender win makes it easy to assume that QAS came out stronger. Contractually that is true. Operationally, the entry into 2026 was narrower: fewer lounges, a renovation period, and then another forced slowdown.

There is also a less visible layer. In 2025 both QAS and the Dan lounge partnership received temporary relief from the Airports Authority in the fee mechanism, so authorization fees were calculated based on gross sales only rather than also leaning on the original minimum-fee floor. For the lounge partnership, that relief applied throughout 2025. In plain terms, 2025 was not a fully normal profitability year under fully normalized concession terms. That means 2026 is not only a traffic test. It is also a profitability test under tighter contractual terms.

2025 Proved QAS Can Recover, But Not In A Straight Line

QAS operates inside a market that is still unstable. International passenger traffic at Ben Gurion rose to about 18.5 million in 2025 from about 13.9 million in 2024, an increase of more than 33%. That is a good number, but it was still about 12% below 2023 and far below the roughly 24 million international passengers seen in 2019.

The more important point is the mix of activity. In 2025 Israeli airlines carried about 58.1% of all international passengers at Ben Gurion, down from 65.8% in 2024. In January and February 2026 that trend became even clearer: the Israeli-airline share fell to 49.8% from 65.3% in the comparable period of 2025. That means the return of foreign airlines had started to show up in the numbers, and that is exactly what QAS needs if it is to get back to a fuller operating level.

What matters here is not only that passengers came back, but who came back. QAS mainly serves scheduled foreign airlines, charter airlines, low-cost carriers, and private-jet operators. So an improvement in Ben Gurion activity that does not come with a real return of foreign airlines is only a partial improvement. True, starting in January 2025 QAS also began providing ground-handling services to Arkia, which became a material customer in 2025, and since July 2024 it has also served Air Haifa. That does provide some domestic cushion. But it does not cancel the dependence on foreign activity. QAS does not depend on one single customer, yet it still has deep system-level dependence on how many foreign airlines actually operate at Ben Gurion and at what frequency.

The market-share numbers also show that the company can execute. QAS's share among the licensed ground handlers rose to about 48% in 2025 from about 35% in 2024. That is a sharp jump, and it means the company did not only benefit from stronger demand. It also recaptured relative volume inside the market. But even here the order matters: first the market reopened, then QAS took a larger share of it. It cannot create the reopening by itself.

That chart puts 2025 in the right perspective. After the 2024 loss, QAS returned to positive territory. But Knafaim's share in QAS pre-tax profit, $1.7 million, was still far from the years when the business was generating around $5 million to $7 million. So 2025 was not a full return. It was a move out of the trough.

Labor, Not Debt, Is The Real Bottleneck

If one variable best explains why QAS still looks like a business that jumps with Ben Gurion, it is not debt. It is labor. The activity is inherently seasonal and usually peaks in the second and third quarters, around summer and holidays. In other words, exactly when the company needs to keep labor available, trained, and scheduled. And this is where the early-2026 numbers look almost extreme.

At the end of 2024 QAS employed 304 full-time-equivalent workers. By the end of 2025 that number had already risen to 715. By the end of February 2026 it had climbed to 847, including initial preparation for Passover and the summer of 2026. A month later, by the end of March 2026, it had already fallen to just 162 as the conflict with Iran disrupted the traffic recovery.

That is the core of the 2026 story. Ground-handling and lounge businesses cannot wait until the aircraft lands and only then begin hiring. They need to recruit, train, retain, and sometimes carry operating readiness before the revenue fully arrives. That means stop-go traffic at Ben Gurion creates a double problem for QAS: if it does not hire in time, it risks missing the recovery; if it hires too early, it can get stuck with a cost base that remains after flights are cut again.

This also explains why the new collective agreement matters more than it first appears. It was signed in July 2025 and runs from June 1, 2025 through May 31, 2028. It gives the company labor structure and order in a volatile period, but it also means part of the cost base is already sitting in place. At the same time, the company itself says wage increases in the Israeli economy and in the minimum wage already led to wage increases at QAS, and the minimum wage is set to rise again in April 2026 by 3.3%. So even if activity returns, not every dollar of revenue is likely to fall back to profit at the same speed.

There is one more volatility layer here. A meaningful part of QAS revenue is denominated in dollars, while much of payroll and operating costs is paid in shekels. That means the margin is sensitive not only to flight volume, but also to FX. So even in a scenario where Ben Gurion activity improves, QAS remains a business whose profitability can swing on several axes at the same time.

2026 Is A Proof Year, Not A Year Of Certainty

The positive point is that QAS does not look like a business struggling to breathe financially. It is generally funded from ongoing revenue and equity. The COVID-era loans it took in the past were fully prepaid early. QAS has no external financial debt. Even in day-to-day operations there is no clear sign of unusual credit stress: average customer credit days fell to 89 in 2025 from 99 in 2024, while average customer credit volume rose to $10.213 million from $6.367 million. In addition, at the end of 2025 current assets stood at about $37 million against current liabilities of about $27 million, implying working-capital surplus of about $10 million.

That means QAS's 2026 test is not whether the balance sheet can survive one more quarter. It is whether the operating system can move from a reactive business into a more continuous one. For that to happen, several things need to come together:

• Passenger traffic needs to keep rising, but more importantly foreign airlines need to come back in meaningful frequencies rather than only in headlines.
• The three new lounges need to move from a contractual win and renovation period into full and steady operation.
• Headcount needs to return to a level that supports the summer peak without throwing the company back into another emergency-hiring-then-cutting cycle.
• The new contractual terms with the Airports Authority need to prove that the business can stay profitable even without the war-related relief that helped 2025.

There is also additional upside, but it sits behind the same gate. The Nayak line-maintenance venture at Ben Gurion, which is supposed to rely in its early years on a services agreement with QAS, returned in early 2026 to a more accelerated setup path after the stronger fourth quarter and the stronger January-February traffic. After the conflict with Iran, it again became hard to estimate when that activity will actually start and at what scale. That shows how even the growth options adjacent to QAS still rest on the same basic question: does Ben Gurion start behaving like a normal airport again.

That is the conclusion of this follow-up: QAS is no longer sitting on a regulatory or financing cliff edge. It is sitting on a real operating business, with strong market share, a global partner, and a clear improvement versus 2024. But 2026 still does not open as a harvest year. It opens as a proof year. If foreign airlines return in stable volume, if the lounges move into full operation, and if labor stabilizes without eating up the operating leverage, QAS can become a meaningful value engine again for Knafaim. If not, it will remain a business that still jumps with Ben Gurion instead of one already standing on its own feet.