Airline El Al Secures $400m in Bailout Deal From Israel Government
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Israeli airline EI Al has reportedly secured $400m in a bailout deal from the Israeli Government.
The carrier has been struggling to deal with the financial troubles.
EI Al stopped operations and suspended passenger flights in response to the outbreak. It had grounded 45 aircraft with 95% of the workforce on unpaid leave.
The Covid-19 pandemic’s travel restrictions and lockdown measures have led to a severe drop in air travel demand.
Israeli Ministry of Finance’s plan has been accepted by the EI Al’s board of directors, the Associated Press (AP) reported.
Under this agreement, the carrier will receive a $250m loan and an additional $150m will be raised via an offering on the Tel Aviv Stock Exchange.
The company will be acquired by the state if they aren’t sold entirely to the public.
It is also required to enter an agreement with different workers committees on the deal.
The state is planning for restructuring, which may result in cutting 33% of the company’s workforce.
The agreement is subject to approval by a parliamentary committee.
Israel Transportation Minister Miri Regev was quoted by the agency as saying: “This evening the first step was taken to return El Al to the runway.
“We will work to assist the company during the interim as is needed with the aim of protecting Israel’s aviation independence.”
Knafaim Holdings is currently operating the carrier after it was privatised in 2004.