El Al has begun laying off employees in line with its restructuring agreement. Hundreds of non-tenure employees, mostly cabin crew, have reportedly received notices about layoffs. Under the airline's rescue deal, the airline will need to reduce its workforce by over 30%, a step it has started taking.
Reduction
According to Globes, El Al has started the process of laying off 2,000 employees this week. Hundreds of the airline's non-tenured temporary staff, mainly cabin crew, received letters summoning them to a hearing before their dismissal. Notices will go out in phases and all employees will remain on unpaid leave until 31st March.
The streamlining agreement was signed between El Al and several worker's committees to keep the airline afloat and secure funding from the government. The move comes six months after Eli Rozenberg took over the airline and restarted the carrier.
In a statement about the layoffs, an El Al spokesperson said,
"As part of the streamlining program, El Al is announcing at a critical juncture on the way to receiving a loan from the state that the company has sent dismissal notices to hundreds of temporary employees only at this stage."
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Reducing the workforce is one of the many conditions El Al needs to fulfill in order to receive government support to survive the crisis. The carrier recently received a $300mn loan from the Ministry of Finance following months of failed negotiations. The loan was contingent on new owner Eli Rozenberg injecting over $40 million into the airline, taking his total investment to nearly $200mn.
However, Rozenberg seems unfazed about further funding the struggling flag carrier. Despite the crisis of the last year, El Al still believes that it has a bright future ahead, with COVID-19 only being a bump in the road.
El Al has seen one major benefit from the government in recent months: vaccinations. The carrier has vaccinated all of its customer-facing employees, including check-in agents, security staff, cabin crew, and pilots.
Israel has raced forward in terms of vaccinations and leads the world in shots per 100 people. The country has given one dose to over 57% of its population and fully vaccinated 47%, according to Bloomberg. With the vaccines proving to be effective, the country has begun considering travel bubbles and COVID-free flights for the future.
Returning to the skies
Despite El Al's efforts to find sound financial footing, the carrier remains limited in where it can fly. Israel had previously "hermetically sealed" its air border to prevent new strains of the virus and later limited El Al to flying limited repatriation flights. Until non-essential travel reopens, the carrier will struggle with growing losses.
However, speedy vaccinations and the reopening of the country provide a brighter future for the struggling flag carrier.
What do you think about El Al's restructuring efforts? Let us know in the comments.