El Al might send 800 employees to unpaid leave due to the sharp decline in the company's operations

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by Ifi Reporter Category:Financial Aug 10, 2021

Four destinations remain on the list of European countries to which travel is permitted, and do not require returnees from them in a week's isolation. This decision, and the refusal of the Ministry of Health to adopt the airlines' proposals for an abbreviated isolation outline, bring Israeli airlines closer to a situation in which they will be forced to open a new and extensive round of layoffs.
Israeli airlines are sharply criticizing government ministries, which have adopted stricter policies on the movement of Israeli passengers. This is in stark contrast to other countries, which continue to remove restrictions in the aviation market - and have made a decision to open up economic activity and deal with an ongoing situation of not low morbidity. Employees of Israeli airlines and their executives are outraged at the government's stubborn refusal to pay even a penny as a grant to compensate them for the decline in activity, at least in part due to government directives. This is in contrast to the hotel industry, which received direct assistance - which, unlike airlines, has a significant internal market.

They point to the de facto nationalization of the world aviation industry, which has been carried out through huge government flows to giant companies such as Lufthansa, Singapore Airlines, Air France and the American companies Delta and United Airlines. El Al, which is controlled by Kenny Rosenberg, intends, according to estimates, to demand a grant of $ 100-150 million from the Ministry of Finance to deal with the aggravation of the corona crisis.
El Al suffers from an exacerbation of cash flow pressure, which stems from three sources: non-entry of new orders; Payment to company suppliers for June and July; And the need to pay their customers for tickets canceled due to tightening restrictions.
El Al is preparing to send another 800 employees on unpaid leave due to the sharp decline in the company's operations and occupancy of its aircraft. In the current reality, where UAV payments have been discontinued, this means the same as layoffs. It is preparing to send another 800 employees to the IDF due to the sharp decline in the company's activity and occupancy in its aircraft. In the current reality, where sick pay payments have been discontinued, this means the same as dismissals.
Yehudit Grisero, VP of Human Resources and Administration at El Al, met yesterday with representatives of the El Al Pilots Committee, and discussed with them the various scenarios of streamlining required in the company following the fall in activity. They expect the controlling shareholder to fulfill its obligation to inject $ 43 million into the company - as part of the assistance package the company received from the state in May 2021, which included a payment of $ 210 million as a down payment for security services in the company's aircraft over the next 20 years.
The pilots - who suffered a 31% drop in their base salaries, 40% of ESL payments and work 75% of the job to allow more pilots to return to employment - are disappointed with the management approach which contented itself with a 20% pay cut at the start of the crisis. Others did not give up a shekel from their salaries, and the controlling owner of the company did not offer them compensation for the deep erosion in their salaries, for example, by allocating options to the company's shares.
Sharon Ben Yitzhak, chairman of the El Al Workers' Committee, mentioned that the company had completed a painful process in which 2,000 of its 6,400 employees were laid off, and the company had 2,000 employees left in the IDF - about half of whom are 45 and under and therefore do not receive payment.
Ben Yitzhak said additional workers could not be fired without losing the professional ability to operate an airline, including engineers, technicians and maintenance workers. Ben Yitzhak further said that he expects the government to accept responsibility as a gold shareholder in the company, and to help it maintain the essential capabilities of a company that functions as a national leader, and is a strategic asset. "While countries around the world have helped airlines, the government is ignoring us as if we were airborne," Ben Yitzhak said.
Gadi Tepper, CEO of Arkia, congratulated the government ministries and the Minister of Transportation who are getting into the thick of things. Edge of capability, fired 50% of its employees - and its remaining employees suffered a pay cut of 10% -40%. Gadi Tepper, CEO of Arkia, congratulated the government ministries and the Minister of Transportation who went into the thick of things. Tepper noted that the airlines are asking the state to produce a permanent methodology for operating or shutting down Israeli airlines in the next six months, so that the companies can produce activity. Tepper said Arkia was reduced to the limit, firing 50% of its employees - and its remaining employees suffered a pay cut of 10% -40%.
He said, "We have a core of employees that is necessary for the company's survival, but if activity is reduced or stopped almost completely, we will have to significantly reduce the number of employees in the company, which now reaches 350." Tepper said the four destinations left uninsulated - Moldova, the Czech Republic, Austria and Hungary - were insufficient to sustain activity.
"Israeli airlines make their money in the summer, and fill the warehouses to get through the winter. At the moment our warehouses are empty. We need immediate compensation to be able to get through this period," said Tepper, who hinted the company would demand $ 30-40 million as a grant. From the country. "The lobby of the airlines is weaker than the lobby of the hotel companies," Tepper said, referring to the fact that the government has so far not flowed a single shekel in a direct grant to the airlines, while the hotel industry has been given a sum of NIS 300 million.
Israir, which, like Arkia, met with representatives of the Prime Minister's Office on Sunday evening, requested financial assistance in the amount of $ 20 million - which will help them overcome the cash flow distress caused by the severe restrictions imposed by the Ministry of Health and Government led by Naftali Bennett. An appeal to the citizens of the country not to fly abroad.

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