El Al CEO Haim Romano.
(photo credit: none)
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
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.