Is El Al Pulling a Scam on Customers?

Israel’s national carrier, El Al Airlines has announced this week that they intend on postponing the launch of their new nonstop service between Tel Aviv and San Francisco.  The service was scheduled to commence in November of this year and the airline had already begun to sell tickets to customers eager to arrive or depart from the “City by the Bay.” The airline announced that the service has been delayed by an entire year and will begin operating in May of 2019.

Disappointed ticket holders are now seeking cash returns on their purchased fares, however El Al’s web site is still offering flights and fares for the SF to TLV route, as of May 25th.

In January of this year, El Al officially announced the new service and in February promptly launched their ticket sales. They have since amassed an impressive customer base for this route.  El Al had planned to offer three weekly flights to San Francisco, which happens to be located near the technology hub of Silicon Valley. The 14-15-hour flights are priced between $1,200-1,600; several hundred dollars more than United Airlines which also operates a direct service between Tel Aviv and San Francisco.

As a result, El Al has taken a major financial hit as stock prices have dropped precipitously as of late. In July of 2017, El Al stock prices listed at $337 per share. In February of 2018, the per share price nosedived to $129 and as of May of 2018 the price per share is listed at $87.

Moreover, it appears that frustration with the manner in which El Al operates has taken its toll in the top brass of the company.

After serving for four years as the company’s CEO, David Maimon announced his resignation in November of 2017. According to a JPost report at the time, Noam Pinko, an airline industry analyst with Psagot Investment House said of Maimon, “I am surprised to hear about his departure. I did not see it coming.”

It remains unclear as to whether Maimon was forced out of the company or if he stepped down voluntarily.

In 2012,  a former Israeli Air Force commander Eliezer Shkedi was the CEO of El Al. According to Jewish Voice publisher David Ben-Hooren,  a conversation took place at that time between himself and Shkedi.

Ben-Hooren says that Shkedi told him that his goal at the fledgling airline was to make “vast improvements” in their daily operations. Ben-Hooren said that Shkedi’s growing frustration with the airline’s insistence on remaining stagnant and their adamant refusal in making much needed changes served a major factor in Shkedi’s decision to leave the employ of the airline.

Ben-Hooren added that Shkedi told him that the inability of the airline to progress in a professional capacity was due to the iron-clad grip that the Histadrut (Israeli Labor party) had over El Al management in terms of hiring policy and job security.

Ben-Hooren offers a cogent case in point.  “With any major or even minor company, you will always see a normal turnover rate within the employee ranks. Not so for El Al.  Just like a civil service job in New York or any city, employees are securely locked in to their positions at El Al,” Ben-Hooren stated.

He pointed to the 30-year employ of Sheryl Stein, (the Manager of  Advertising, Public Relations and Social Media for EL AL Israel Airlines) who is based in New York City.  According to an employee profile that appeared on LinkedIn web site, Ms. Stein began her career at El Al in July of 1988.

Said Ben-Hooren, with shock in his voice. “What other prominent company would allow an employee to stay on that length of time in a position? It just does not work that way. Companies are always replacing employees with new and exceptionally qualified candidates who possess the kind of skills necessary to discharge their duties in the fast-paced business environment.”

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