Israeli carrier El Al raises demands for state aid, appeals to prime minister

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JERUSALEM – Israel’s flag carrier El Al airlines said on Thursday it requested $100 million in compensation from the government for its strict COVID-19 travel policies and asked the prime minister to help end a stalemate in bailout talks.

El Al was particularly vulnerable at the outbreak of the COVID-19 pandemic in early 2020. It has reported losses for three years and had racked up debt to renew its fleet.

The company’s financial woes were compounded by travel limitations in Israel meant to prevent new outbreaks, and like many airlines around the world it turned to the state for help. It also has new ownership and management, which has been feuding over terms with the government for months.

El Al laid off 1,900 employees, nearly one-third of its staff, as part of a recovery plan mandated by the government to receive a $210 million aid package earlier in the year, and reduced its fleet to 29 from 45. But that, it has now said, was not enough.

“The Israeli aviation sector is perched above a slippery slope, and there is still doubt whether Israeli aviation companies can survive the crisis without government assistance,” the CEOs of El Al and two small local rivals wrote to Prime Minister Naftali Bennett.

They asked him to help settle things in an emergency meeting.

In a separate letter to the director general of the Finance Ministry, EL Al CEO Avigal Soreq said his airline was “demanding immediate compensation for $100 million for damages caused to El Al due to decisions by the state.”

Earlier in the month the Finance Ministry said it was ready to offer $50 million more in aid if its owners injected the same amount as part of a new aid framework. The ministry, in a statement on Thursday, said its position remains the same.

The airlines, in their letter, asked the prime minister to re-examine the Finance Ministry’s demands of their owners. They also asked him to end some health restrictions that have hurt air travel, like mandatory quarantine for kids and vaccinated travelers.

Reuters

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