Tuesday, July 23, 2024
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El Al Needs a Bailout

El Al, Israel Airlines, is in serious difficulty, after a year and a half of pandemic. The Israeli government has put far more restrictions on air travel than almost any government, except  for Australia and New Zealand. Moreover, the government or, more directly, the professionals in the Finance Ministry have been very stingy in supporting the airlines — primarily, giving them loans, and in El Al’s case, prepaying for the seats of security personnel. By some estimates, the Israeli government has extended El Al half as much support as the US government and Europeans has offered their national airlines (calculated on a per plane basis).

The Israeli Treasury has demanded El Al find further operational savings. As a result, the management has proposed a cut of its fleet by one-third, from 45 to 29 aircraft, mainly by selling, or terminating the lease on its fleet of 737s. In addition, El Al plans on cutting its workforce by another third. El Al would then concentrate on the North American market, along with the major cities of Europe. 



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