El Al asked the Treasury to increase the loan granted them by a state guarantee

Last week, El Al asked the Treasury to increase the loan granted to it by a state guarantee, in light of the ongoing crisis in the aviation industry. However, she moved in the negative: "El Al has new owners and they are supposed to help her."
During the discussion, which took place at Zoom, which was attended by Deputy Finance Minister Eran Yaakov, retiring El Al CEO Gonen Ussishkin and the new chairman, David Brodet, El Al claimed, as expected, that the corona crisis is ongoing and therefore needs increased assistance. .
A source in the Ministry of Finance said: "El Al should understand that it is not a government company, but a private one, and the responsibility in the end is theirs. It is not possible to reach the country with difficulty. Therefore, the finance ministry wants to see the company and its owners take responsibility for the incident."
This is a $ 250 million loan with a 75% state guarantee, which is part of the $ 400 million assistance that the state approved for El Al. But the amount of aid was set six months ago, when there was still hope that in 2021 the airport would return to reasonable activity and the corona virus would weaken. In reality, the virus continues to rage, Europe is closing in on a second wave of the Corona and the World Aviation Organization's forecast, at present, predicts that only in 2024 will aviation return to reasonable activity.
In this situation, it is clear that if El Al relies solely on $ 400 million in state aid and not on additional funding, the amount will not be enough for the company to survive the period. In this context, it should be noted that part of the issue money, approximately $ 147 million that was channeled to El Al, was used to reimburse passengers whose flights were canceled.
Even before the IPO, EL AL almost went bankrupt and its coffers were emptied. Also, even before the application, due to disputes between the lending banks and the Treasury over the interest rate on the loan and the Treasury's opposition to the consortium of lending banks, the loan was stuck and still not closed, even after the new owners entered. Negotiations with the banks are hampered by the fact that it seems that the world and aviation are not expected to return to normal in the coming year.