European group looks to purchase Arkia

A major European company is interested in purchasing the 75% of Arkia Israel Airlines that is up for grabs.

December 15, 2005 07:51
2 minute read.
arkia logo 88

arkia logo 88. (photo credit: )


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A major European company is interested in purchasing the 75 percent of Arkia Israel Airlines that is up for grabs. Arkia Chairman and President Rafi Harlev, addressing a press conference in Tel Aviv on Wednesday, said that Hanina Brandes, the trustee responsible for the charter carrier, informed him this week that he was approached about Arkia by the investor who requested a meeting to learn more about the company. Harlev did not provide any further information about the request and said even he was not given the name of the interested party. The Europeans join the Nakash Brothers and the Arkia workers, represented by the MAI Group (Management of Arkia Israel), as potential buyers of the shares from Knafaim, which was required to sell the 75% when it bought a controlling stake in El Al from the government in November. The employees, who own the remaining 25% of Arkia, had signed an agreement to buy the company in March but the deal fell through with unresolved terms at the September 30 deadline, at which control point Brandes took responsibility for the sale. The deal is hanging over the heads of a company that has been running at a loss for the last number of years. "We didn't expect it to go on this long and the uncertainty is having a negative affect on morale at the company," Harlev said. "We just hope it ends as soon as possible." Harlev reported that Arkia will have a net loss of $4.5m. for 2005, representing an improvement from the $15m. loss recorded last year. The company forecasts a return to profits in 2006, expecting between $2.5m. and $5m. from its airline operations without taking into account its leasing agreements. Following the prorate agreement signed last month with Qatar Airways for connection packages with Arkia flights to Amman, Harlev said the company has been in contact with other gulf state companies who "want to do business with the company." Arkia is looking to begin scheduled flights to Kazakhstan, Harlev added.

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