The Chairman of Israeli airline Arkia has warned that the carrier could be grounded until as long as April next year. According to reports, Avi Homero said on July 9th that the airline might remain out of action until after Passover 2021. What’s going on?
Arkia remains grounded
Back on March 18th, the Government of Israel shut its borders to foreign travelers. Four months on and the country is still reluctant to open up to international travel in a bid to curb additional cases of coronavirus in the country. It’s a decision that has affected Israel’s airlines hard.
Arkia grounded its small fleet back in March to comply with the country’s legislation and lessening demand for air travel. Five of its aircraft remain grounded, and the airline is in limbo about when it will be allowed to operate again.
While many are hopeful, earlier today, the Chairman of Arkia warned that a return to normalcy for the airline could be much further in the future. Avi Homero told the Israeli business news website Globes that it might not be until next year that Arkia returns to the skies.
He told reporters that “there is still no decision” about when Arkia will operate again, and he confirmed that the airline was “thinking about” keeping the fleet grounded until after Passover 2021.
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What will happen if Arkia stays grounded?
Interestingly, however, Homero’s is not an opinion that is shared by all. Israeli economist Yaron Zelekha who also heads the worker’s council that has a 30% stake in Arkia, says that the airline will be operational again sooner than that. He says that he would like to get the airline back into the sky as soon as it is viable.
That will be an outcome that many others will hope for too. Arkia recently extended the deadline for unpaid leave for its entire workforce. All 500 employees at the airline will go without pay until July 31st. Of course, any extension on the grounding of the fleet provides further uncertainty and dwindling prospects for Arkia’s workforce.
Things have also already changed for the airline. It has already returned one Airbus A321neo to lessors in the US in a bid to conserve cash. That leaves two A321neos and three Embraer 190/195 whose fate is yet to be decided.
Will things get better?
It is unclear just how long Arkia will remain grounded; however, there is hope for its recovery. Unlike flag carrier El Al who has struggled to secure government funding, Arkia was one of two airlines to whom the Israeli government said it would offer assistance.
On May 8th, the Ministry of Finance in the country said it was preparing a state-backed loan of NIS 100m (US$28.5m) to support the recovery of Arkia and Israir.
To invest such capital in Arkia shows that the airline is thought to be viable for the future. Arkia will play a vital role in providing routes out of the country when borders open again.
That’s not to say that Arkia’s return will be imminent. It won’t be. Israel’s strategy for reopening is a measured one. It said in the middle of June that Greece and Cyprus would be the first international travelers allowed to return to the country, however not until August 1st. For the moment, all other non-citizens and non-residents will be refused entry into Israel.
When do you think Arkia will be in operation again? Let us know your thoughts in the comments.