El Al prepares to receive Dreamliners
El Al Israel Airlines Ltd. is preparing to receive a fleet of new Dreamliner 787 jets to be purchased at a cost of more than $1 billion.
The company on Tuesday reported it had signed a 15-year $125 million agreement with a foreign international company for obtaining support and logistics services for the planes. Under the agreement, the foreign company will provide El Al with an inventory of parts in Israel supplied from the foreign company’s logistics centers in Israel and overseas, as well as repair and renovation services for the parts.
El Al has an option to withhold a number of airplanes that it purchased from the services agreement. In addition, it has an option to terminate the agreement starting in its fifth year.
El Al is scheduled to receive its first Dreamliner in August this year, the second in October and the remaining planes later, with all of them being delivered by the end of 2020.
The deal with Boeing, which El Al CEO David Maimon previously called “the largest procurement in El Al’s history,” includes the purchase of 16 Boeing 787-8 and 787-9 Dreamliners, engines and spare parts. Payment will be made for each plane when it is delivered, minus an earlier 30% down payment. The airliners are slated to gradually replace El Al’s Boeing 747s and 767s and will be used for mediumand long-haul flights.
El Al is controlled by Knafaim Holdings Ltd., whose controlling shareholders are husband and wife Tami and Dedi Borovich and Poju Zabludowicz.