El Al has denied media reports that it has rejected a government bailout. The airline said on June 19th that it was still in talks with the Ministry of Finance, and its latest communications were merely to make amendments.
El Al is still in talks with the Israeli government
El Al continues to await financial support despite previous reports that it could face closure. Back on April 6th, the Chairman at El Al shared that the airline could close if it did not receive assistance. Over two months later and El Al is still awaiting support from the state.
On Thursday, June 18th, Hebrew media outlets reported that El Al had openly rejected the government bailout in a letter to the Ministry of Finance. In fact, El Al insists that this is not what happened. Rather than outright dismissing the government’s help, El Al said it had merely submitted adjustments.
In a statement released on June 19th and translated from Hebrew, the airline said,
“[El Al] sent proposals to the Ministry of Finance yesterday to make adjustments to the integrated layout [of the financial assistance]…to address the difficulties the company sees…”
El Al is still looking for support to weather the pandemic.
El Al still wants support
In the statement, El Al continued to state that it was still making headway on coming to an acceptable stimulus package. It said,
“[El Al] intends to continue discussions with the Ministry of Finance on receiving assistance from the State and continue the examination of the relevant aid notes.”
There’s no denying that El Al would rather receive this package sooner than later. Still, the conditions need to be right. The airline has already pushed back its return of passenger flights, which were meant to begin at the end of this month. From August, El Al hopes that it will be able to restart some of its operations.
What’s more, it will want to address staffing. It currently has 6,000 employees out of 6,500 on unpaid leave. This will continue until July 31st.
How does the government want to help?
The reason why El Al’s bailout has been so fraught with difficulties is because of the terms. The airline had sought $400m from the government, but this was later reduced to $250m with El Al left to raise $150m worth of aid on its own.
The airline is looking to do this through the sale of shares. The agreement, at present, would give the Israeli government 60% ownership in the airline, making it the majority stakeholder. Renationalization of the airline has always been a delicate subject. However, the government insists that reverting the private airline to full government-ownership has never been a realistic solution.
As it stands, El Al will continue to work with the Ministry of Finance to come to a solution. However, it has warned that this might not happen any time soon. Concluding its statement, El Al said, that there is no certainty to what outline will actually be agreed, or that the conditions under which it will be provided can be achieved.
When do you think El Al will receive government funding? Do you think the airline will be saved? Let us know your thoughts in the comments.