(March 25, 2020 / JNS) The Israeli airline El Al is requesting $200 to $300 million in loans from the state to overcome the challenging situation caused by the coronavirus.
“Our situation worsens with each passing day,” El Al CEO Gonen Usishkin wrote in a letter to employees, the business daily Globes reported on Wednesday. “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.”
The fact that the letter was published seems to indicate that the company wants it known in order to increase pressure on the government.
Usishkin mentioned El Al’s efforts in returning Israelis from Australia, Peru and other locations as examples of “how critical having a national airline” is to Israel and how without it, “Israel is liable to become an island under siege.”
El Al is a private company with the state owning the majority of shares.
The CEO also pointed out, according to the report, that the company’s revenue has almost completely dried up because of the stoppage of flights and the closing of borders due to COVID-19.
Usishkin noted that 85 percent of El Al’s workers are on unpaid leave, and that the company submitted a solvency plan to the Finance Ministry.
He argued that the government had two options: First, to allow the airline to collapse, losing its NIS 2.5 billion ($690 million) contribution to GDP, its professional experience and commercial ties that the aviation took years to accumulate, and especially the heavy costs, amounting to billions of dollars, merely to recreate the air fleet.
The second option would be a $200 to $-300 million state loan that would enable El Al to recover and quickly resume regular activity.
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