the government approved the assistance outline to El Al and Israir NIS 737 over 20 years

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by Ifi Reporter Category:Financial May 9, 2021

The government has approved the Ministry of Finance's outline of assistance to the aviation industry, following the corona crisis and severe damage to the industry. As part of the approval of the outline, the agreements signed between the Ministry of Finance and El Al and Israir were approved, under which the state will purchase in advance a fixed amount and value of flight tickets for the employees of the aviation security system, for a period of 20 years. This amount will not change even if there is a change in the volume of tickets required in accordance with the security guidelines.
According to the agreement, the state will pay El about NIS 685 million and Israir about NIS 52 million over 20 years. The Ministry of Finance conditioned the transfer of the amounts to the companies in that the shareholders would also contribute to strengthening the financial stability of the companies. Therefore, the outline includes a commitment by the shareholders to issue shares to increase the companies' capital in the amount of 50% of the amount of assistance provided to each company, as well as a commitment to refrain from withdrawing dividends for the next five years.
Last week, members of the finance committee demanded that the government "approve today" the outline of aid to El Al. This is on the grounds that El Al's situation requires immediate assistance. For three months now, El Al CEO Avigal Soreq has said in a committee discussion that "El Al is facing the greatest crisis in its history. The Israeli government has decided to help, we have met all the conditions signed in the March agreement, and since then we have been captive to the agreement and can not implement the efficiency plan, not to return money to suppliers, not to return money to customers.
"We said we are fulfilling this agreement but we need certainty and speed. We are a month and a half behind and the issue is delayed. It hurts workers, suppliers, customers. Other countries are also contacting us. We need to have a telephone vote tonight and respect the agreements and understandings we reached with the Treasury. "Delay is critical and the consequences are dangerous for companies. It is time for action."
The current outline is formulated in light of the prolongation of the corona crisis and the exceptional damage to the aviation industry, and as a result, the Ministry of Finance acted to establish an economic assistance program that will allow immediate flow that will facilitate airlines' operations during this period. The plan will replace the outline previously proposed to El Al to provide a designated state guarantee for a loan it will take from the banks.
The Minister of Finance, Israel Katz, stated: "Understanding that the aviation industry is in a difficult and unique situation, and to ensure the resilience of civil aviation in Israel, the Ministry of Finance will provide assistance that will facilitate airlines' activities during this period. We will continue to do our best to help deal with consequences The Corona Crisis. "
According to Sharon Ben Yitzhak, Chairman of the El Al Workers' Committee, "I would like to thank the ministers and Knesset members from the Likud and White Brush who understood the magnitude of the hour and cooperated in approving the loan, thus preventing the collapse of El Al. El Al employees cherish and appreciate the assistance and expect to return from the hospital to full-time work and march the company forward to the day after the corona. "

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