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Will El Al Airlines Declare Bankruptcy? Company Extends Halt on Passenger Flights until End of July

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Edited by: JV Staff

El Al has extended its halt on all scheduled passenger flights to and from Israel until July 31, the airline informed the Tel Aviv Stock Exchange on Wednesday, with the exception of cargo flights and one-off services.

The previous date announced by El Al earlier this month was June 30th. Some 6,000 of the carrier’s 6,500 staff are also on unpaid leave until July 31.

In its notification to the Tel Aviv Stock Exchange (TASE), El Al said that while Israel continues to bar foreigners from entering and requires Israelis returning from abroad to undergo 14 days self-isolation, it will continue its suspension of flights, according to a report on the Globes web site.

As was reported by Globes, El Al is not hopeful of a resumption in August after Prime Minister Benjamin Netanyahu announced yesterday that he only plans opening Israel’s borders between Greece and Cyprus on August 1, if the rate of Covid-19 infections does not climb.

El Al is deep in debt and is under pressure to fire at least 2,000 employees, reduce its fleet and the number of destinations it flies to in order to receive a government bailout, as was reported by Globes.

Observers of the airline have stated that service on the carrier has dramatically declined over the years and have attributed the exceptionally poor service to the fact that El Al employees are protected by a very strong union. “There is absolutely no accountability whatsoever amongst El Al employees because they know they are protected as are their salaries. They have no incentive to perform well and to receive positive customer satisfaction comments,” said a company official that spoke on the condition of anonymity.

Others have critiqued the upper level management of the company for its stagnant performance. “I happen to know that El Al has had the same person heading up their public relations department for the last 30 years. This person has single handedly alienated potential vendors and partners, but the real question is, who decides who stays in power at El Al and who decides who does not,” said the official.

Rumors have been circulating for quite some time that El Al is considering bankruptcy as an option to deal with its growing financial woes.

Regular travelers to Israel and other destinations have taken note of the rising stars in El Al’s competition. They have remarked that at one time, El Al had a monopoly on the security aspect of air travel and that passengers could rest assured that they were safe from terrorism or any other mishap that could possibly happen on an international flight, but that is no longer the case.

“Every airline that flies to Israel has extraordinary security and El Al’s does not stand out from the rest,”  said the official.

 

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