El Al CEO: Israel must decide if it wants an airline

In a letter to his company’s employees, El Al Israel Airlines Ltd. (TASE: ELAL) CEO Gonen Usishkin said that assistance from the state was critical for the company, and there was still no breakthrough on the matter.

“Our situation worsens with each passing day, We’re approaching the point at which the state must decide whether it wants a national airline, or whether it believes that aviation security is not an important and substantial element in national security,” he wrote, citing the company’s recent flights for returning Israelis from Australia and Peru, among other places, as proof of “how critical having a national airline will be for Israel, without which Israel is liable to become an island under siege.”

Usishkin calls El Al a national airline, but El Al has not been state-owned since 2005, despite the golden share in it held by the state, “which signifies El Al’s status as a strategic asset.”

Usishkin also mentioned that the airline’s revenue has almost completely dried up, among other things because of orders issued by the state and the relatively early closing of the borders, which put El Al into a state of crisis earlier than other airlines.

Referring to the over 85% of El Al’s workers who have been put on unpaid leave, Usishkin wrote, “We have a plan that we presented to the Ministry of Finance, under which we will be able to meet the challenge and move El Al towards a stable and secure future. The plan ensures a more efficient and more punctual El Al with operational adjustments, so that it will be able to cope with the competition and economic damage caused by the coronavirus crisis.

“The plan we submitted will enable the state to make a decision about immediate assistance for El Al… There is no way out of this crisis without painful measures and decisions. It is time for leadership and responsibility by the nation’s leaders, the workers’ leaders, and El Al management. The government has two alternatives. One is the airline’s collapse and the loss of its NIS 2.5 billion contribution to GDP, its professional experience and commercial ties, the aviation rights that took years to accumulate, and especially the heavy costs, amounting to billions of dollars, merely to recreate the air fleet, eventually reaching a risky process of attaining a capability similar to that which currently exists. The second alternative is a $200-300 million state loan that will enable El Al to recover and quickly resume regular activity.”

Published by Globes, Israel business news – en.globes.co.il – on March 25, 2020

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Article source: https://en.globes.co.il/en/article-1001323354#utm_source=RSS