El Al's Boeing 737: grounded.
Tis Meyer/Planepics.org
Israeli national airline
El Al halts all flights
The Israeli national airline is suffering greatly from the corona crisis. A disagreement with the pilots is now even leading to El Al's planes remaining on the ground indefinitely.
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CEO Gonen Usishkin has made a dramatic decision. He ordered the return of all planes to Tel Aviv. As a result, since Wednesday (July, 1) the entire fleet of El Al has been grounded. The grounding applies for an indefinite period.
The reason for the flight stop is a dispute between El Al's management and the cockpit crews. According to TV channel KAN, the union of pilots announced that the management of the company «has not respected the agreements signed with the union less than a month ago» and that they have no choice but to conclude that the owners are not able to save El Al. Of the 650 pilots, 540 are currently not working and are not being paid.
Uncertainty over state aid
The pilots criticize that the management has rejected the government's rescue plan so far. Two options are on the table. One involves a state-guaranteed loan and a capital increase, the other only a state-guaranteed loan. In particular, the clause that the state could become a shareholder in El Al again if the capital increase fails is not well received by the owners.
Between January and March alone, before the Corona crisis really got going, El Al lost 140 million dollars. This means that the quarterly loss is massively higher than the loss for the whole of 2019, when it was 60 million dollars. The financial situation, which was already tense before the pandemic, has thus deteriorated massively. And the EU's decision this week not to allow Israeli travellers to enter the country because of the high rate of infection in the country is a further blow to them.
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