El Al plans to lay off 1,500 others and sells 26 planes

The management of El Al Israel Airlines Ltd. (TASE: ELAL) Radical changes designed to deal with the financial crisis caused by the ongoing Covid pandemic. Management wants to sell up to 26 aircraft and lay off 1,500 employees. El Al currently owns a fleet of 45 aircraft and management wants to reduce the fleet size to 29 aircraft or less. As part of this simplification, El Al will reportedly stress the North American market and stop flights on some routes between Israel and Europe, leaving it with its primary destinations in Europe. As a result, most of the aircraft to be sold are likely to be Boeing 737 narrow-body aircraft. In addition to reducing its fleet and routes to Europe, El Al is seeking to lay off an additional 1,500 employees. The company currently has 4,000 employees, including 1,400 on unpaid leave as of Oct. 31, and after laying off 2,000 over the past year. El Al’s management is in turbulent talks with the Workers’ Committee and the Histadrut regarding the planned cuts. There has been a particularly stormy meeting in the past few days, at which proposed layoffs were presented for the first time. The employees insisted that any unilateral action taken by El Al management in this matter would result in penalties and disruption. El Al employees already announced a labor dispute some time ago, which allowed them to take immediate action, if they so decided. The head of the Histadrut Transportation Workers’ Committee, Avi Edri, said, “The ink is not dry on the separation agreement with about 2,000 El Al employees. We ended up firing the permanent employees of El El and asking the Israeli government to get off the fence.” and the introduction of flexible paid leave for the aviation sector. We believe that the aviation sector will stabilize soon and most El Al employees will become more important to the company.” “We do not establish business relationships through media organizations,” El Al said. It is expected that El Al will respond positively to the Finance Ministry’s offer of $50 million in aid, Which was conditional on the sale of a significant portion of the company’s fleet.The $50 million grant to El Al would be in the form of an unrelated bond that could be converted into shares, without collateral and without interest.El El could either repay the money or the government would automatically increase its stake in The airline from 15% today to 24%, by converting the loan into shares.Under the terms of this plan, controlling shareholder Kenny Rosenberg will be required to inject an additional $43 million into the company, as part of a public offering of $105 million in stock.Rosenberg has already invested $160 million in El Al (for a 42.85% stake), which has a market capitalization of NIS 820 million El El recently received $210 million from the state to purchase tickets for security personnel over the next 20 years Published by Globes, Israel business news – en.globes.co.il – on September 20, 2021 Copyright Globes Publisher Itonut (1983) Ltd. 2021