Thursday, 14 May 2020

EL AL appeals to Benjamin Netanyahu to force Finance Ministry to cut conditions required to gaurantee bailout loan of $400 million.

El Al Israel Airlines has asked the Israeli Prime Minister, Benjamin Netanyahu to think again on conditions set for state-guaranteed loans.

The Israeli government is requesting a complete overhaul of the carrier, including cutting staff numbers before it will agree to provide baking for a series of loans to help the airline through the coronavirus COVID-19 crisis. The airline wants the government to guarantee up to 80% of loans amounting to $400 million.  

A source at the airline told news agency Reuters that it had offered to cut 2000 jobs, reduce yearly expenditure by $350 million but Finance Ministry officials wanted more.

EL AL CEO Gonen Usishkin has sent a letter to Netanyahu advising him that the government’s hard stance would force the carrier into bankruptcy. “We ask that you instruct the Finance Ministry to amend the plan and remove the impossible conditions,” he wrote, adding it “refuses to connect El Al to a ventilator, as most countries in the world have done”.

In an attempt to blackmail the government the airline said it had committed to refund over $285 mullion to customers who've had flights cancelled,  but unless the authorities guarantee the loans relaxed conditions, the airline would go bankrupt and customers would lose this money. 

Usishkin said that in the event of bankruptcy Israel’s security would be harmed since the country would be reliant on others, while 30,000 direct and indirect households would lose their livelihoods, and the economy would lose millions each year.









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