Finance Ministry Rejects El Al’s Request for a $350 Million Loan
JNS.org – Israel’s national airline El Al affirmed in a statement on Monday that the Israeli Finance Ministry had rejected its request for a $350 million loan to help it through the coronavirus pandemic, and said it was appealing the decision to Israeli Prime Minister Benjamin Netanyahu.
According to Israeli media reports, at a Sunday meeting between El Al, the CEO of Israel’s Discount Bank and the Finance Ministry, ministry representatives said that they do not believe it is not financially feasible for the airline to repay such a loan.
El Al said in a statement to the Tel Aviv Stock Exchange that it has now turned to the Israeli government for assistance, and that “state support in the near term is essential to allow the company to cope with the consequences of the coronavirus crisis.”
The only other option, El Al CEO Gonen Usishkin said last month, is to “allow the airline to collapse, losing its NIS 2.5 billion [$690 million] contribution to GDP, its professional experience and commercial ties that … took years to accumulate, and especially the heavy costs, amounting to billions of dollars, merely to recreate the air fleet.”
El Al, which is a private company the state owns the majority of shares in, suspended commercial flights last month and is struggling with loss of business due to flight cancellations and travel restrictions during the coronavirus pandemic.
Since the virus outbreak, El Al has put 5,500 workers, representing more than 85 percent of its workforce, on unpaid leave. The company has, in recent weeks, operated cargo flights and flights bringing home Israelis stranded around the world by the crisis in coordination with Israel’s defense and foreign ministries.