El Al CEO to leave within 18 months

El Al CEO Haim Romano (photo credit: none)
El Al CEO Haim Romano
(photo credit: none)
El Al CEO Haim Romano will end his tenure within 18months, after four and a half years in the position, El Al IsraelAirlines announced Sunday.
"This is not a good sign for the company," anindustry source told The Jerusalem Post Sunday. "The announcement wasunexpected, but it speaks of the problems and difficulties the carrierhas been facing over recent months, with workers on the one hand, andon the other hand, with trying to cope with fierce competition withinthe aviation industry amid the global financial crisis."
The national carrier's board of directors convened Sundaymorning to discuss renewing Romano's contract, which ends next May. Itrequires him to give six months notice should he decide to leave. Afterthe meeting, El Al announced that management has come to an agreementwith Romano according to which he will leave his post within 18 monthsand be entitled to 18 months of salary remuneration, as stipulated inhis personal contract.
At the end of July, El Al workers who are members of theHistadrut Labor Federation declared a work dispute over changes totheir conditions. The changes were aimed at reducing perks thatmanagement said were not found in any other workplace in the privatesector. El Al started to charge workers the tax on airline tickets andis requiring them to pay for meals, among other things. Previousdisputes included attempts to cut salaries by 10 percent.
Ongoing disagreements between El Al management andits workers' committee have been cited by people with knowledge of thematter as one of the reasons for Romano's departure.
Over the past three years, Romano has focused on attempts toimprove El Al's efficiency and recoup losses stemming from the SecondLebanon War and the global financial crisis. He has been trying toimplement a cost-cutting plan, which includes canceling unprofitableroutes, reducing jobs and launching new routes, such as Tel Aviv-SaoPaolo earlier this year.
Throughout his tenure, Romano has been strugglingwith rising fuel prices, changes in the value of the US dollar and thegovernment's "open skies" policy that allows foreign airlines andIsraeli airlines to compete on El Al's most profitable routes.
In the second quarter of the year, El Al posted a wider netloss, as the global financial crisis continued to hit inbound andoutbound passenger and cargo traffic. Facing fierce competition fromforeign 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 ashare, a year earlier. Revenues for the quarter fell 28 percent to$399.4m., mainly due to a 3.5% decline in the number of internationalpassengers 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.