El Al was refused by the government a $ 700 million state guarantee for a loan and a $ 700 million grant

El Al faces a significant flow challenge after the Treasury rejected a request that lasted until the wee hours of the night, its request for assistance, claiming its efficiency plan was inadequate. El Al asked the Treasury for a $ 700 million state guarantee for a loan and a $ 700 million grant, claiming that the Department of Health's directive not to fly non-essential flights resulted in massive cancellations of bookings.
The Accountant General and the Budget Department of the Treasury demanded from Mal a streamlining plan that would allow her to repay the loans she received. El Al's plan included free vacation expenses of 80% of the company's employees, layoffs of 1,350 employees (which is 21% of the company's employees) including 600 permanent and 750 temporary employees, as well as a cessation of investments, for example, at the subsidiary TM's aircraft plant. . The plan, which was prepared with the assistance of the accounting firm BDO, was based on a three-step forecast: the bleeding phase, in which the company is missing revenue due to the almost complete silence of its operations. The recovery phase, with the end of the Corona crisis where there will be a gradual return of passengers. And the stage of growth where the company will return to full activity and earn.
El Al's main problem is the serious crisis in the history of the aviation industry, leveraged by a plan to buy and lease 16 Dreamliner aircraft over the past three years, which has increased the company's net financial debt to $ 1.8 billion. El Al also faces collective bargaining agreements that make it difficult for it to lower its fixed-income base, which is a necessity to meet the extra interest payments resulting from receiving the Treasury's mediation loan.