El Al CEO to Netanyahu: You carry responsibility for airline's collapse

"As prime minister, you carry the ultimate responsibility for that, after seventy-two years, El Al will finish its journey on your watch."

An Israeli flag is seen on the first of Israel's El Al Airlines order of 16 Boeing 787-9 Dreamliner jets, as it lands at Ben Gurion International Airport, near Tel Aviv (photo credit: REUTERS/AMIR COHEN)
An Israeli flag is seen on the first of Israel's El Al Airlines order of 16 Boeing 787-9 Dreamliner jets, as it lands at Ben Gurion International Airport, near Tel Aviv
(photo credit: REUTERS/AMIR COHEN)
El Al chief executive Gonen Usishkin  warned Prime Minister Benjamin Netanyahu on Wednesday that he will carry the “ultimate responsibility” should the struggling Israeli airline collapse. The latest terms of the government’s proposed bailout plan are an attempt to liquidate the company, he said.

In a sharply worded letter to Netanyahu, Usishkin said the airline had received a set of impossible conditions late Tuesday night to receive a government-secured loan, considered to be critical in the flag carrier’s efforts to survive the impact of the coronavirus pandemic.

“Last night, we received a document in which the Finance Ministry raised additional demands that cannot be implemented, the sole purpose of which is to lead to the liquidation of El Al,” Usishkin wrote. “As prime minister, you carry the ultimate responsibility for that. After 72 years, El Al will finish its journey on your watch.”

Despite months of negotiations between El Al, the Finance Ministry and commercial banks to secure a $400 million government-backed loan, Usishkin said the latest government bailout proposal effectively amounted to “signing the death certificate of El Al.”

Any deal is likely to require severe cost-cutting measures and layoffs expected to affect 2,000 workers, approximately one-third of the airline’s workforce. The cuts will require the approval of El Al’s workers union.

The immediate impact of letting the airline collapse, Usishkin wrote, would harm Israel’s national security by ending its aviation independence, risk the livelihood of 10,000 households headed by El Al staff, and 30,000 households indirectly reliant on the airline, and cause the loss of national aircraft, more than NIS 1 billion ($280m.) in ticket refunds for passengers, NIS 2.5b. ($710m.) in annual GDP and other national strategic assets.

“As you certainly know, El Al finds itself in a situation of unprecedented difficulty due to no fault of its own,” he wrote. “The Finance Ministry’s claims that El Al’s difficulties and need for a loan are due to its precrisis management are without foundation and have no grip on reality.”

Usishkin called on Netanyahu to instruct Finance Ministry officials to fix the proposal and accused the ministry of “refusing to connect El Al to a ventilator, as has been the case in most countries worldwide.”

Last week, El Al said it would extend its halt on all scheduled commercial flights to and from Israel until May 30. It cited new measures announced by the Health Ministry, which did not include lifting the requirement on self-quarantine for passengers arriving in Israel or enabling noncitizens to enter the country.

El Al also extended the unpaid leave of thousands of employees until June 30. About 6,000 employees of El Al and its subsidiaries are currently on unpaid leave.

In a letter to the airline’s employees, Usishkin said bringing back staff from unpaid leave would only be gradual and in line with the growth of the company’s commercial activities. That will only be possible if the airline receives the government-secured loan it is currently negotiating, he said.


Tags El Al