El Al gets taxpayer bailout

V EL AL, Israel’s insolvent national carrier, has accepted a government bailout worth up to $350 million to keep the airline in business.

The Israeli government will guarantee 75 per cent of a $250 million loan to the company and has committed to purchasing up to $150 million in El Al stock, which would leave the state controlling a 61 per cent stake – effectively nationalising the airline.

El Al, which was privatised in 2004, holds more than $2 bn in debt and had been facing ruin due to the pandemic and a pilots’ strike.

Commercial flights have been cancelled until the end of July, and the airline has been forced to place 80 per cent of its 6,300 workers on unpaid leave.

Under the bailout agreement, approved by El Al’s Board of Directors on Sunday, the company will negotiate agreements with the four trade unions that represent El Al workers in a bid to make the company operational again.

On Wednesday, El Al signed agreements with its maintenance and administrative staff in a deal that was expected to save the company $88 million a year. The agreement will see around one third of the unions’ 4,000 El Al employees made redundant.