Elyezer Shkedy at Jpost Conference 370.
(photo credit: Screenshot)
El Al CEO Elyezer Shkedy on Sunday announced his resignation, effective as soon as a replacement is found and installed.
“I am finishing my position with pride and a sense of great satisfaction,” Shkedy wrote in a letter to El Al employees. He called the position “one of the most challenging positions in the Israeli economy,” but did not specify any particular reason for his resignation after four years in the job.
Since Shkedy took the airline’s helm in 2010, it has registered a loss of $17.4 million and its share price has fallen 38 percent, according to Globes, though the company swung back into profitability in the first three quarters of the year, posting a $29m. profit.
El Al stock closed up 1.28% following the announcement.
Shkedy said he regretted that he was unable to complete a new labor agreement, a requirement for a major investment from investment firm FIMI. “El Al must reduce its spending for the good of its people’s and passengers’ future if it wants to continue growing, to be competitive and able to cope in the aviation industry, which is volatile and challenging.”
Losing the $75 million FIMI in October was one of the major blights on Shkedy’s resumé, and likely influenced his decision to leave.
“On some level there was internal criticism from the board that Shkedy didn’t do enough to get FIMI on board and try to push for an agreement with the union,” an airline industry source told The Jerusalem Post. “When you can’t bring in a big investor – and FIMI is one of the most serious investment houses tied to Israel – it doesn’t bode well.”
Shkedy may have taken the opportunity to exit before any explicit pressure built up for his ouster, but El Al’s chairman of the board, Amikam Cohen, cast aside any notions of an internal coup.
“The board regretfully accepted Shkedy’s announcement on his decision to end his role and added that Shkedy’s special personality, management and contributions to the El Al company deserved special appreciation, and were expressed in every work area in a very complex and challenging company,” he said.
Shkedy said that during his tenure, the airline had initiated purchases and reconfigurations that would increase its fleet by 20%, increased club membership, changed its fueling policy and reduced security costs. El Al won great government support for its security spending during an April strike over the approval of Open Skies Agreement.
Just a week earlier, El Al launched a low-cost carrier called Up to compete with the increasing numbers of cheap flights coming in from Europe as a result of the Open Skies Agreement.
Serious challenges await whoever is chosen to replace Shkedy. His successor will need to work out how to cut costs and streamline the company’s management and workforce, and decide whether to change its Shabbat no-flight policy to increase its flights.
Shkedy said he would remain on in the position until his successor is chosen.