EL AL IN CRISIS
V ISRAEL’S NATIONAL carrier, El Al, is facing the prospect of a sustained shutdown as a bitter dispute between management and the pilots union caused the cancellation of the small number of flights scheduled this week including Thursday’s flight to London.
Like all other airlines, El Al has been hit by the pandemic crisis, and to make things worse, the global downturn in air travel came just when the airline had purchased a new fleet of Boeing 787 Dreamliners to replace its older wide-bodies.
Earlier this week the company reported record losses of 140 million dollars in the first quarter, with the second expected to be even worse. The forecast for the coming months is dire as well, since Israel is now suffering a second-wave of Covid-19 infections, which has caused the European Union to put it on the list of countries whose citizens will not be allowed entry for the time being.
Over the last few months, what little revenue El Al has generated has come from “rescue flights” of Israelis stranded abroad and its passenger planes have been used for chartered cargo flights of protective gear from Chinese factories. But there are no more Israelis clamouring to return home and as other airlines have begun to renew operations, cargo capacity is no longer at a premium either. Most of El Al’s scheduled flights for July were twice-weekly services to destinations, including New York, London and Paris.
The Israeli government has proposed two bail-out plans for the privately-owned company, a emergency loan of $400 million, most of which to be underwritten by the government, or a smaller loan of $250 million and a partial nationalisation of the airline for which the government would pay the shareholders $150 million.
El Al’s owners are holding out for a better offer from the government and have meanwhile furloughed 5,800 employees, out of the airline’s total workforce of 6,300. The powerful pilots’ union is trying to pressure the company to accept the nationalisation deal and in an attempt to strongarm management, on Tuesday pilots beganavoiding call-ups for upcoming flights, causing abrupt cancellations.
The owners have decided to call the pilots’ bluff and on Wednesday announced that all the aircraft currently abroad are being returned to base at Ben Gurion Airport and that no flights are now scheduled until the end of July. Senior sources in the company warned they may be forced to freeze operations completely while the unions accused management of “holding the employees hostage.”
Israel’s other airlines are in crisis as well. Arkia, owned by the IsraeliAmerican Nakash family suspended all operations back in March and the CEO of Israir announced this week that the company will be forced to suspend its twice-daily flight from Ben Gurion to Eilat if government support is not forthcoming.
El Al’s record losses in the first quarter were $140 million’
El Al’s pilots want the company to be partly nationalised