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Israel agrees on more aid for El Al Airlines amid COVID travel bans

Stock MarketsDec 30, 2021 02:55PM ET
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© Reuters. FILE PHOTO: An Israel El Al airlines plane is seen after its landing following its inaugural flight between Tel Aviv and Nice at Nice international airport, France, April 4, 2019. REUTERS/Eric Gaillard

By Steven Scheer

JERUSALEM (Reuters) - Israel's government said on Thursday it would give additional aid to El Al Airlines to help compensate for the reimposition of a COVID-19 entry ban on foreign tourists and restrictions on overseas travel by Israelis.

Israel's flag carrier will receive tens of millions of dollars from the state and El Al's controlling shareholders to help it weather the pandemic, and the rapid spread of the Omicron variant, according to a Finance Ministry statement.

The aid will be given over the next few months, and Israel's other main airlines, Arkia and Israir, will also be offered a similar deal, the ministry said.

El Al has been pressing the government for another aid package, with Israelis barred by the government from travelling to dozens of countries, including the United States and Britain, and an entry ban on foreigners back in force.

"The new outline will allow (airlines) to overcome the pandemic while maintaining the principle that state aid will be provided along with external capital to strengthen their capital structure," said Finance Minister Avigdor Lieberman.

"I hope that in the coming month we will open the skies to those entering and leaving."

Israel had closed its borders in March 2020 at the outset of the pandemic. In November 2021, foreigners were briefly allowed in but the rapid spread of the Omicron variant led Israel's government to tighten travel restrictions.

El Al has laid off 1,900 employees - nearly one-third of its staff - as part of a recovery plan mandated by the government to receive a $210 million aid package earlier in the year. It also reduced its fleet to 29 from 45.

The airline also was set to receive another $30 million in aid due to the restrictions over the summer.

El Al lost a net $136.2 million in the third quarter, a period that is typically its strongest, compared with a $146.6 million loss a year earlier. Revenue jumped to $253 million from $39.2 million a year ago, when borders were largely shut.

It had initially believed sales for the fourth quarter would be higher in the wake of the government’s approval for tourists vaccinated within the prior six months to enter Israel as of November 1.

Israel agrees on more aid for El Al Airlines amid COVID travel bans
 

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