The Israeli Airports Authority (IAA) has barred El Al from performing cargo-only flights, effectively grounding the airline. The decision was made as the Israeli flag carrier has accumulated approximately $17.3 million in debt to the airport.
Passenger flights in Israel remain banned due to the coronavirus, with no current date for recommencement. As Israel has banned foreign nationals from entering the state, there is no passenger demand. Repatriation flights also remain scarce leaving El Al’s last means to earn income as operating cargo flights.
Now with this effective blocking by the IAA, El Al seems to be edging closer to bankruptcy. The airline has been in talks with the Israeli government for a $400 million bailout but has been unable to reach terms for any agreement.
An emergency meeting to discuss the terms has taken place recently with Israel’s Transportation Minister Miri Regev in attendance, as reported by The Jerusalem Post. There have been no reports on whether both parties have agreed on an outcome.
Six thousand of El Al’s employees are on no-pay leave until the end of June. That’s 90 per cent of its workers that remain in uncertainty.
If the government’s bailout proposal is agreed upon as it stands, one-third of these workers will lose their jobs permanently. The worker’s union has not accepted the dismissal terms.
The IAA worker’s union is also speaking out against the ban on flights. As reported by The Jerusalem Post, “2,500 IAA employees currently on unpaid leave are set to stop receiving financial assistance on July 1.”
The decision comes about as the state remains unable to open its borders to foreign nationals anytime soon, leaving the airport non-operational.
Managing director of Ben-Gurion Airport, Shmuel Zakai, only anticipates reopening doors in mid-July.
