El Al Could Layoff 1,000 Employees As Coronavirus Impacts Financials

Israeli flag carrier El Al said today that it was considering cutting 1,000 jobs from its workforce. The cuts are being made in response to decreased demand and travel restrictions coming out of the coronavirus outbreak. The airline currently has a total workforce of around 6,000 staff.

El Al Could Layoff 1,000 Employees As Coronavirus Impacts Financials
1,000 employees of El Al could lose their jobs due to coronavirus impacts. Photo: Getty Images

According to the DailyMail, a company spokesman confirmed the plan. However, no further details were given regarding the matter.

Numerous flight suspensions

El Al has had to suspend a number of services as it tries to deal with travel restrictions imposed by the Israeli government as well as reduced demand from would-be customers. The majority of services suspended are to the far east. According to El Al’s website, these are the most recent schedule modifications:

  • Beijing – service to the Chinese capital will be suspended until May 2.
  • Hong Kong – flights to the city will also be suspended until May 2.
  • Bangkok –  Flights to the Thai capital will be suspended from March 2 to 27.
  • Tokyo – The Company will delay the launch of its new Tokyo route to April 4.

In light of the recent outbreak in Italy, the airline is also temporarily suspending its services to all of its Italian destinations. The destinations are:

  • Milan
  • Venice
  • Rome
  • and Naples (on Sun d’Or flights)

These flight suspensions for Italy service began on Friday and will last until March 14.

Sheremetyevo Airport Coronavirus
Fully-clad staff are providing health checks for passengers at risk – seen here at Moscow’s Sheremetyevo Airport. This is becoming a common scene at airports around the world. Photo: Getty Images

With the airline monitoring the situation, any of the above flight suspensions are subject to change and may be lengthened if the situation gets worse. The airline had said it would reinstate flights ahead of scheduled dates should conditions improve.

However, the way things are progressing, this does not seem likely. In a statement made two weeks ago, the airline’s CEO said:

“We are continually monitoring the reports from China. We hope that the recent cautious optimism as reported in the global media will indeed continue in the coming days.  Nevertheless, we at EL AL have decided to make commercial adjustments to the schedule in the Far East and increase frequencies to North America and Europe with a focus on the upcoming Passover period.” -Gonen Usishkin, CEO of EL AL

The impact on El Al’s profits

A report last week to the Tel Aviv Stock Exchange, revealed that El Al estimated its losses from the COVID-19 virus to be US$50-70 million. This is for the first quarter of 2020. However, the numbers don’t take into account the recent Italy route closures.

Meanwhile, some of El Al’s employees are protesting outside Tel Aviv’s main airport, appealing for government intervention and assistance:

“We are in an emergency…I am appealing to the Israeli government and its leader… an emergency and an interim support payment must be given to the company so that it can survive.” -Arnon Ben-David , Histadrut trade union chairman via DailyMail

Ben-David says that the union and El Al workers’ committee are engaging in “marathon talks” with management.

el-al
El Al will lose at least US$50 million in the first quarter of 2020. Photo: El Al

Conclusion

El Al’s case may become fairly standard in the days and weeks to come, as other airlines around the world suspend their services to Italy, Thailand, and a number of east Asian destinations. Many of these locations would have generated a great deal of revenue for airlines due to their popularity as Spring getaway/vacation destinations.

Is your job affected due to the coronavirus and its impact on the global economy? Let us know in the comments.

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