El Al Extends Unpaid Leave, Says Can’t Resume Without Bailout
El Al Israel Airlines on Monday extended unpaid leave for 5,800 workers until July 31 and said that without state aid it will not be able to resume operations once the country’s borders, shut over the coronavirus crisis, reopen.
Israel‘s flag carrier on Sunday extended a suspension of scheduled commercial flights until June 30, but said it would continue to use its aircraft for cargo and occasional passenger flights.
While Israel has eased its coronavirus restrictions in the past few weeks, incoming passengers are still required to self isolate and a ban on foreigners entering the country remains in place.
Due to weak demand, El Al halted flights in late March and the suspension has been extended repeatedly.
El Al has been seeking state-backed loans of $400 million to help it through the coronavirus crisis. The government is asking the airline to issue $150 million in shares as part of the bailout package that would require significant cost-cutting measures. It also includes a $250 million state-backed loan.
In a letter to employees, chief executive Gonen Usishkin said El Al is studying the latest government offer.
“We are at a critical junction for El Al’s future and are doing everything we can to find the way to ensure prosperity and a stable and secure future for El Al,” he wrote, adding that the airline needs funds to pay its debts to customers and suppliers.