El Al cancels all passenger flights, cargo planes also expected to cease

“The company cannot continue to bleed. If the company loses, it is better to stop the activity and wait for better times,” said Avi Edri, chairman of the Transport Division of the Histadrut union.

By David Isaac, World Israel News

El Al halted all passenger flights on Wednesday after an angry pilot’s union said pilots wouldn’t fly due to a dispute with the airline brought on by its dire financial straits, a result of the global pandemic, Globes reported on Wednesday.

El Al is also expected to cancel all cargo flights. This is partly due to the fact that foreign airlines have started returning to Tel Aviv and are carrying cargo in their passenger planes, a fact made easier by the lower number of passengers on those flights.

According to Kan news, the pilot’s union expressed its displeasure at company management in its announcement: “The administration of the company did not even respect the agreements that were signed with the union less than a month ago. The union had no choice but to reach the conclusion that the owners of the company are unable to save it from its situation.”

Airlines are on the frontlines in terms of the economic damage wrought by Covid-19. El Al reported first quarter losses of $140 million. Since March, El Al has stopped flying almost entirely due to the corona crisis.

The state carrier in May asked for government-backed loans of $400 million to help it weather the crisis. The pilot’s union is reportedly in favor of another plan, which would lead to nationalization of El Al. In that plan, Israel’s Finance Ministry would back $250 million in bank loans on condition that El Al issue $150 million in shares, which the state would buy if no one else did, making it a majority owner.

However, government officials are not in favor of nationalization. “The state is not interested in nationalizing El Al and making it a government company. The aim is to assist the company so it can recover from the crisis,” a Finance Ministry official told Reuters in mid-May.

Finance Minister Yisrael Katz and Prime Minister Benjamin Netanyahu have told the Finance Ministry to assist El Al and prevent its collapse.

El Al said in response to the pilot’s union that it’s determined to do everything possible to meet the government’s requirements in order to receive the aid it needs. “To this end, responsibility and leadership is required from all parties involved in the process, the pilot’s union, the management and the employees’ representatives,” the company said.

“The company is in a bad situation,” said Avi Edri, chairman of the Transport Division of the Histadrut union.

“It is the company’s duty to minimize the damage that will be caused to the company and its employees, and so on the one hand it is difficult to see a reduction in activity, but on the other hand, if the company loses, it is better to stop the activity and wait for better times,” he said.

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