El Al denied media reports that he rejected a government bailout. The airline said on June 19 that it was still in talks with the Finance Ministry and that its latest communications were simply to make changes.
El Al is still in talks with the Israeli government
El Al continues to wait for financial support despite previous reports that it may be shut down. On April 6, the president of El Al said the airline could shut down if it did not receive help. More than two months later, El Al is still awaiting state support.
On Thursday, June 18, Hebrew media reported that El Al openly rejected the government’s bailout in a letter to the Ministry of Finance. In fact, El Al insists that’s not what happened. Rather than categorically rejecting government aid, El Al said he had simply submitted adjustments.
In a statement released on June 19 and translated from Hebrew, the airline said:
“[El Al] yesterday sent proposals to the Ministry of Finance to make adjustments to the built-in layout [of the financial assistance]… To respond to the difficulties encountered by the company… ”
El Al is still seeking support to overcome the pandemic.
El Al still wants support
In the statement, El Al continued to say he is still making progress towards an acceptable stimulus package. It said,
“[El Al] intends to continue discussions with the Ministry of Finance on the granting of state aid and to continue examining the related aid notes.
There is no denying that El Al would prefer to receive this package as soon as possible. The conditions must still be met. The airline has already postponed the return of its passenger flights, which were due to start at the end of this month. From August, El Al hopes to be able to resume some of its operations.
In addition, he will want to take care of staffing. It currently has 6,000 employees out of 6,500 on unpaid leave. This will continue until July 31.
How does the government want to help?
The reason El Al’s bailout has been so fraught with difficulty is because of the conditions. The airline had requested $ 400 million from the government, but that amount was later reduced to $ 250 million, with El Al remaining to raise $ 150 million in aid itself.
The airline is seeking to do so by selling shares. The deal, currently, would give the Israeli government a 60% stake in the airline, making it the majority shareholder. The re-nationalization of the airline has always been a delicate subject. However, the government insists that returning 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 find a solution. However, he warned that might not happen any time soon. Concluding his statement, El Al said that there is no certainty as to which plan will actually be agreed upon, or that the conditions under which it will be delivered 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.