As the death toll from the coronavirus passes 2,000, Transportation Minister Bezalel Smotrich is claiming that it has cost El Al $50 million. The Israeli national flag carrier has been hit hard by a decline in passenger numbers, as have all airlines that do business with China. Ever since the start of the epidemic in Wuhan, China people have been reluctant to fly worried that they may contract the deadly virus.
Even a small Middle Eastern country like Israel cannot escape the coronavirus’ knock-on effect with the country’s Transport Minister saying that the government may have to help El Al.
“I think the state will need to put its hand into its pocket, as they do in other national crises, including natural disasters,” Smotrich told was reported by JPost to have said on Tuesday.
Since the start of the coronavirus epidemic, El Al has lost $50 million
Due to a drop in bookings and cancelations, El Al has lost around $50 million so far. This figure is likely to continue to grow until the Chinese government can get a handle on the crisis and curtail the spread of the disease.
Smotrich is now warning that without government intervention the State of Israel could find itself without and airline within a few months. These comments from the government official come on the back of remarks made by El Al CEO Gonen Usishkin in an employee email on Monday when he said, according to Israel newspaper Hamodia:
“There are difficult days ahead and it is possible that we will be required to take dramatic steps and make painful decisions.”
While no mention of layoffs was mentioned the underlying message was that cuts were coming. When speaking about the Transport Ministers’ remarks an El Al executive is quoted as saying:
“We welcome the Minister of transport’s initiative to assist Israeli airlines. We think that it is right, given the challenge at this time, which combines force majeure [events beyond the airlines’ control] with state decisions affecting us.”
All flights canceled
By saying what he said, it was obvious that he was referring to the Israeli government’s decision to cancel all flights from China. It has also decided to deny entry to any foreigners who had traveled to Hong Kong, Macau, Singapore, and Thailand within the past two weeks.
“These are decisions made by the state. They are making the situation worse with other countries, and are affecting us commercially. The importance of Israeli civil aviation to the Israeli economy and the ability to fly Israelis home in a crisis is critical. This crisis, which results from force majeure, mandates state support, and we thank the minister for his handling of the matter,” the executive added.
Smotrich claims that he has been in contact with the Minister of Finance Moshe Kahlon about providing compensation to El Al. He added that he intends to raise the matter with Israel Prime Minister Benjamin Netanyahu.
Israel is better prepared than many other countries
“We are as well prepared or perhaps better prepared than any other country.
“So far we have succeeded in preventing the entry of the virus… I will do everything to prevent it from happening or to postpone it for as long as possible.”
While reassuring, the Israeli public remains on edge following fake news on social media saying that the coronavirus had spread to Israel. Concerning this, the Ministry of Health released a press statement saying such news “causes deliberate deception.”
“Official announcements and updates can only be received through the authorized bodies in the Ministry of Health.”
Other airlines could ask for government help
It will be interesting to see if Israel does, in fact, offer El Al compensation due to the coronavirus and if other countries follow suit in helping their national carriers weather the storm.
Before this is over we could very well see several airlines in serious financial trouble without outside help.
What do you think about the Israeli government helping El Al, should they give the airline money or should they tell El Al to downsize and cut costs? Please let us know your thoughts in the comments.