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Home  >  EL AL • News  >  As EL AL Warns Of Collapse, Israel Promises Support
EL ALNews

As EL AL Warns Of Collapse, Israel Promises Support

Matthew Klint Posted onMarch 2, 2020March 2, 2020 9 Comments

The spread of COVID-19 has not been kind to EL AL, which is laying off workers and warning off an imminent collapse. But the Israeli government has publicly pledged to step in with support, if required.

EL AL Warns Of Collapse, Announces Job Cuts

Last week, an EL AL official warned:

“It’s a catastrophe. The airlines here will collapse within weeks. El Al, even before the Health Ministry announcement, sustained damage of 200 million shekels from the coronavirus.

“If the state doesn’t wake up there won’t be an airline here in a matter of weeks.”

The Health Ministry announcement was a warning to Israelis to avoid all non-essential travel abroad.

While more measured, EL AL CEO Gonen Usishkin also offered a grave warning:

“There are difficult days ahead and it is possible that we will be required to take dramatic steps and make painful decisions.”

Those painful decisions have already begun, with EL AL announcement late last week that it will fire 1,000 employees, about 1/6 of its workforce.

Unions were taken by surprise and some in Israel view this simply as a negotiating tactic, but EL AL has suspended service to Asia (finally suspending service to Bangkok after earlier suspending service to China and Hong Kong and delaying new service to Tokyo) and is now cutting back service to Europe.

EL AL has also let go flight attendant and pilot trainees and announced a general hiring freeze.

EL AL met with union negotiators yesterday in Tel Aviv. While no resolution has been announced, the union is urging swift action and allegiance to EL AL:

“We’re in a state of emergency. All the authorities need to act to prevent the collapse of El Al and the other airlines. I will tell all the committees to fly with only Israeli companies.”

Israeli Government Pledges Support

Prime Minister Benjamin Netanyahu has formed a committee to explore ways to help EL AL and told workers:

“I appreciate the work you do, and we will help you and care for El Al.”

The bailout may not be with direct cash aid, but by cutting taxes/fees and providing marketing assistance in an effort to boost tourism once COVID-19 is under control.

EL AL expects to lose $50-70 million in revenue this quarter and that projection was before EL AL’s latest suspension of flights to Milan.

CONCLUSION

It’s a rough time for the global airline industry, but EL AL has been hit particularly hard. With the Israeli government urging citizens to stay him and tightening its borders, EL AL has suffered greatly. But seen as a national asset, even financial collapse will not doom EL AL.

image: Shahar Azran / EL AL

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About Author

Matthew Klint

Matthew is an avid traveler who calls Los Angeles home. Each year he travels more than 200,000 miles by air and has visited more than 135 countries. Working both in the aviation industry and as a travel consultant, Matthew has been featured in major media outlets around the world and uses his Live and Let's Fly blog to share the latest news in the airline industry, commentary on frequent flyer programs, and detailed reports of his worldwide travel.

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9 Comments

  1. Dan Reply
    March 2, 2020 at 9:49 am

    It’s very possible most airlines will need a bailout by the time this is all over. How long could the US4 sustain significant restrictions on air travel, which seem very possible in the near future. The US government can’t let two or three of the big four airlines fail due to travel restrictions. This is the type of extraordinary situation that calls for government intervention rather than letting the market decide.

    • debit Reply
      March 2, 2020 at 9:59 am

      Yup. Watch all capitalists become socialists now. Hallmark of an ass$%le that thinks their bailout is not socialsm but everyone else’s bailout is bad. Half of this country is like that.

      Go down like the men you pretend to be. I doubt it. Their leader is a whiner.

  2. Cy Reply
    March 2, 2020 at 10:02 am

    I’m anxiously awaiting a press release from Ed Bastian decrying this blatant government interference in the Israeli airline industry

  3. DaninMCI Reply
    March 2, 2020 at 10:31 am

    Hopefully, this won’t become a 9-11 financial event for the travel industry. They kind of deserve to be punished for some activities over the past few years with devaluations, cramped seats, etc. but not far enough to go out of business.
    What I really can’t figure out is why a person would troll and comment on subjects like this or even read travel industry-related blogs if they hate capitalism so much and think the soviet or uber-successful Marx Lenin model is the way to go. Then again I can’t imagine Bernie Sanders taking over a free-market country.

    • debit Reply
      March 2, 2020 at 10:43 am

      I don’t hate capitalism. I hate ass$%les that pretend to be capitalists and humans. It’s the hypocrites i hate. And one party seems to have a lot of them that conveniently ask for forgiveness from god for being a shi%%y human. I don’t hate bill gates. He is an exceptional human being. He is a capitalist with empathy and humility. Read up his article in new England journal of medicine about the outbreak.

      Anyway i think Matthew should start writing blog posts about travel related companies to invest in. Soon it will be time to find bargains.

    • Aaron Reply
      March 2, 2020 at 10:45 am

      Except Bernie wants the Nordic European style socialism.

      Granted, capitalism lately is failing pretty badly, so maybe a new way of doing things is required.

      Also, what does being a fan of socialism have to do with reading/following blogs like this?

  4. rjb Reply
    March 2, 2020 at 10:36 am

    I’d like to get a beer someday with DaninMCI. We are on the same page.

  5. Simon Reply
    March 9, 2020 at 1:30 pm

    https://reut.rs/3aG7Pno

    Korean and I’m assuming many other Asian carriers.

  6. Pingback: American-Israeli yeshiva student takes reins of El Al | The New York Press News Agency

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