26-year-old yeshiva student takes reins of El Al, some strings attached

The new owner of the country’s national airline, Eli Rozenberg, is not allowed to ask his father, US-based businessman Kenny Rozenberg, for any additional investment in the company.

El Al plane (photo credit: ERIC GAILLARD/REUTERS)
El Al plane
Eli Rozenberg, a 26-year-old yeshiva student with no previous experience in tourism or airlines, is the new owner of El Al following a Friday decision by the State of Israel to grant him control of the company.
The joint decision by Transportation Minister Miri Regev, Alternate Prime Minister Benny Gantz and Communications Minister Dudi Amsalem was made after the airline’s lawyer, Avigdor Klagsbald, argued in late September that the young Rozenberg serves as a cover for his father, US businessman Kenny Rozenberg, and that the company the young Rozenberg is the head of – Kanfei Nesharim (Eagles’ Wings) – is really controlled by his father.
El Al is seen as an asset of national importance and, as a result, Israeli law demands a citizen serve as its owner.
While the young Rozenberg is a citizen, his father is not. Kenny Rozenberg did provide his son with the needed NIS 359 million ($103m.) for his company to purchase 42.9% of the airline stocks. The State of Israel bought 14% of the stocks for the sum of NIS 115 m. ($33m.). The state is also willing to support 75% of an up-and-coming $250m. loan the airline plans to secure from Israeli banks.
The previous controllers of the company, vice chairwoman Tami Mozes-Borovitz and her husband, Oded Borovitz, did not buy a single stock when they were issued.
The state attached several strings to the decision, The Marker reported on Sunday. The new owner will not be able to ask his father for any more funds concerning El Al. The new CEO of the airline, as well as the majority of the board, will need to be people with at least five years of experience in the field. No blood relatives of the Rosenberg family may hold positions in the company. The young owner cannot sell his stocks to his father nor can his company sell more than 5% of its stocks without the approval of the Israeli authorities.
It appears that the only thing Kanfei Nesharim is legally allowed to do is to own El Al stocks.
What did Kanfei Nesharim purchase? El Al is suffering from massive losses due to the heavy blow COVID-19 inflicted on tourism, as well as the decision by the current government to halt flights to and from the country, a decision only being partially implemented after many Israelis decided to spend the second lockdown period elsewhere.
The airline owes $280m. as compensation to passengers who were unable to fly due to the pandemic, it suffers from a deficit of $135m. and owes $125m. to other companies that lease its planes. It remains to be seen how the young Rozenberg intends to redirect the airline from a nose dive to a steady flight toward success.
El Al is not the only national airline to need aid during COVID-19,  but the Israeli company traditionally benefited from its high status in the eyes of the public as well as policy-makers. Regev publicly committed to ensure El Al won’t shut down.
In the past, El Al’s pilots union resisted attempts to cut member’s salaries, which are significantly higher than pilots of other airlines, and top El Al executives enjoyed high salaries as well.
Critics of the current efforts to save it point to these irregularities and ask: What is the point of pumping public money to save the national airline if, six months or a year down the road, it would have the same norms – if not the same owners?