According to Israeli media reports El Al is recalling all aircraft (passenger and cargo) to home soil and suspending flights for an indefinite period as financial losses keep piling up.
El Al has been in trouble for quite some time due to it’s high debt load but also because of conflict with unions and disagreements with the political elite in the country.
Except for lone news reports there has been no official announcement about this on the carriers website itself and the decision comes on top of a suspension for most fights that was already announced until the end of July.
Now according to Globes Israel the entire fleet will stay on the ground until further notice.
El Al has stopped flying. The company has cancelled two passenger flights and four cargo flights scheduled for today.
Sources inform “Globes” that El Al CEO Gonen Usishkin has ordered that all the company’s aircraft should be flown back to Israel, including those on cargo rounds (such as a flight that took off to Milan yesterday, and from there to London to pick up cargo), with the aim of halting activity entirely. It appears that the airline does not plan to operate cargo flights and special passenger flights to particular destinations. The company has already announced that scheduled passenger flights will be halted until July 31.
The cargo business has in any case been diminishing, as foreign airlines restore flights to Tel Aviv. Customers prefer sending cargo in the holds of passenger aircraft, the possibilities for which have now expanded. This has reduced cargo prices.
Yesterday evening, El Al reported a $140 million loss for the first quarter. It seeks a $400 million cash injection, and has been conducting negotiations on two possible formats: receiving the entire sum as a loan mostly backed by a state guarantee, or a state guaranteed loan of $250 million and an equity offering of $150 million, also with state backing. …
Yesterday, the new chairman of the pilots committee, Captain Nir Reuveni,, accused the airline’s management of being incapable of reaching agreements with the employees, of having refuse a generous offer from the Ministry of Finance, and of being incapable of leading the company at this time.
Most of the pilots, like most of the rest of El Al’s employees, 5,800 out of 6,300, are currently on leave without pay. Only 110 of the airline’s 650 pilots are currently working. …
“The company is not in a good position,” says Avi Edri, chairperson of the transport workers union at the Histadrut. “The company cannot continue to hemorrhage, and if it came to the conclusion that it was preferable for it to cease flying, that means that it is losing on the flights that it is operating. …
The debts Edri mentions include refunds amounting to $350 million owed to passengers whose flights were cancelled as a consequence of the coronavirus outbreak.
The signs aren’t good for El Al but the airline might in the end benefit from the special security situation Israel finds itself in and the fact that the carrier has established exceptional safety protocols in order to guarantee a safe transportation of passengers and cargo.
It’s also the only airline for the rather small country so it’s hard to imagine how it would function without El Al either remaining in place as it is or to be reborn overnight with a different name. Of course there are foreign carriers that still serve Tel Aviv on a daily basis but that means a detour through Europe for every flight.
Meanwhile the website of El Al only mentions cancellations until July 31st 2020 as a result of Covid-19.
Following a further assessment, EL AL has decided to extend the suspension of its flights until July 31, 2020 (Sun d’Or flights are also suspended until July 31, 2020).
The Company will continue to operate cargo flights to/from Israel and passenger flights as required (Details regarding planed passenger flights can be found below).
All flight tickets for canceled flights are currently frozen, and you will be able to use them in the future.
The only remaining passenger flight has been Tel Aviv-London-Paris-Tel Aviv and Tel Aviv-Paris which according to these latest developments is now gone as well.
Conclusion
If this suspension remains then travelers in Israel might be faced with a long lasting dilemma of having to detour via continental Europe for every flight since the ME3 airlines don’t operate regular flights out of Tel Aviv.
El Al isn’t the first and won’t be the last airline that has to succumb during Covid-19 times, already burdened by high debt and labor disputes even before the Coronavirus became an issue. If the airline will ever take off again in it’s current form or will file for bankruptcy remains to be seen.
