Israel’s flag carrier El Al has agreed with Boeing to delay the delivery of its final Boeing 787-8 for a second time. Boeing granted the deferral due to financial complications caused by the global pandemic. The aircraft was due to join the El Al fleet in March of this year, but delivery was delayed earlier this year until the end of November. Now, it has been extended again to March 2021.
One remaining delivery
El Al was nearing the end of its fleet renewal schedule, which started in 2017 with the delivery of its first 787 Dreamliner. Things went pretty much according to plan, with 15 787s now in the carriers’ fleet. However, the final 787-8 has now been delayed twice. Originally, the final aircraft was due to join the fleet in March, but financial issues caused by the global downturn meant delays.
According to FlightGlobal, Boeing and El Al reached an agreement meaning the delivery was extended until the end of November. With the deadline just days away, El Al announced at its third-quarter results that this has been extended to March 2021. This means the final Dreamliner will join the Israeli airline a year late.
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El Al is at the end of a fleet renewal process, which has seen them retire their aging 747 fleet and replace them with 787 Dreamliners. Of the 16 Dreamliners on order, 12 are the larger 787-9, and four are 787-8s. Only one final 787-8 is outstanding.
El Al signed a $122 million financing agreement in February to help it fund the aircraft’s down payments. The jet was due to arrive just one month later. The loan agreement expired in May, and El Al and Boeing worked together to defer delivery until November. However, as the pandemic continues, El Al needed more time to repay loans used to finance the jet. The final stage of its fleet changes is falling at the final hurdle.
Yesterday, El Al announced its third-quarter results, which show just how difficult this year has been for airlines. El Al and the Israeli government failed to agree on conditions for a state-loan, so the airline is considering a public bond sale to raise more money. It previously sold shares last month to raise capital.
As well as raising money and deferring delivery of its final Dreamliner, El Al has had to cut 2,000 jobs and reduce salaries in an attempt to stem cash flow. However, this may not be enough. In a statement, the airline concluded that “At this stage, there are significant doubts about the continued existence” of the airline.
However, with borders starting to reopen, El Al is hopeful it will operate more flights in the coming months. The airline has scheduled flights to resume operations to Moscow and start flights to Dubai in the coming weeks. However, the question remains as to whether the airline will recover from its financial difficulties in time to take delivery of the final Dreamliner in March 2021.
What do you think of the latest news from El Al? Will the airline be able to struggle through until March to take delivery of the final 787-8? Let us know what you think in the comments.