El Al CEO Haim Romano 248.88 courtesy.
(photo credit: )
El Al CEO Haim Romano will end his tenure within 18 months, after four and a half years in the position, El Al Israel Airlines announced Sunday.
"This is not a good sign for the company," an industry source told The Jerusalem Post Sunday. "The announcement was unexpected, but it speaks of the problems and difficulties the carrier has been facing over recent months, with workers on the one hand, and on the other hand, with trying to cope with fierce competition within the aviation industry amid the global financial crisis."
The national carrier's board of directors convened Sunday morning to discuss renewing Romano's contract, which ends next May. It requires him to give six months notice should he decide to leave. After the meeting, El Al announced that management has come to an agreement with Romano according to which he will leave his post within 18 months and be entitled to 18 months of salary remuneration, as stipulated in his personal contract.
At the end of July, El Al workers who are members of the Histadrut Labor Federation declared a work dispute over changes to their conditions. The changes were aimed at reducing perks that management said were not found in any other workplace in the private sector. El Al started to charge workers the tax on airline tickets and is requiring them to pay for meals, among other things. Previous disputes included attempts to cut salaries by 10 percent.
Ongoing disagreements between El Al management and its workers' committee have been cited by people with knowledge of the matter as one of the reasons for Romano's departure.
Over the past three years, Romano has focused on attempts to improve El Al's efficiency and recoup losses stemming from the Second Lebanon War and the global financial crisis. He has been trying to implement a cost-cutting plan, which includes canceling unprofitable routes, reducing jobs and launching new routes, such as Tel Aviv-Sao Paolo earlier this year.
Throughout his tenure, Romano has been struggling with rising fuel prices, changes in the value of the US dollar and the government's "open skies" policy that allows foreign airlines and Israeli airlines to compete on El Al's most profitable routes.
In the second quarter of the year, El Al posted a wider net loss, as the global financial crisis continued to hit inbound and outbound passenger and cargo traffic. Facing fierce competition from foreign airlines, El Al reported a quarterly net loss of $19.7 million, or 4 cents per diluted share, from a net loss of $12.8m., or 3 cents a share, a year earlier. Revenues for the quarter fell 28 percent to $399.4m., mainly due to a 3.5% decline in the number of international passengers and a 26% plunge in cargo activity at Ben-Gurion Airport, which drove down cargo prices significantly.
Romano joined El Al's management in 2005 after working for Partner Communications.