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Home Economy Business & Finance

Israeli flag carrier to fire 1,700 as part of gov't bailout plan

Layoffs expected to save Israel's national air carrier $88 million per year. Some workers to be given ‎early retirement, others will leave with "enhanced" severance packages. ‎

by  Reuters and ILH Staff
Published on  07-08-2020 14:36
Last modified: 07-08-2020 15:02
Israeli flag carrier to fire 1,700 as part of gov't bailout planAFP/Jack Guez

El Al aircraft at Ben-Gurion International Airport | Photo: AFP/Jack Guez

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El Al Israel Airlines said on Wednesday it has reached an agreement with its administrative and ‎engineering workers that will save the battered airline $88 million a year.‎

This follows an agreement reached two weeks ago with its flight attendants to save $30 million ‎annually.‎

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El Al said the three agreements will result in a reduction of 1,700 employees in its workforce of 6,500.‎

Some workers will be offered early retirement while others will be let go with enhanced ‎compensation packages.‎

‎"The agreements signed have given a real chance to El Al's recovery and to the possibility it will return ‎to being the flag carrier of Israel's aviation industry," said Avi Edri, chairman of the transport workers ‎union at the Histadrut Labor Federation. ‎

On Monday, El Al's board agreed to a bailout that will likely put the carrier back under state ownership ‎after the coronavirus crisis pushed it to the verge of bankruptcy.‎

The government has offered to back $250 million in bank loans while El Al must issue $150 million in ‎shares, which the state will buy if no one else does. The bailout is contingent on its unions signing off ‎on cost-cutting measures. A deal with pilots still needs to be reached.‎

El Al, which has reported losses for two years running and racked up debt in order to renew its fleet, ‎suspended flights when Israel closed its borders and furloughed most of its employees.‎

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Tags: bailoutCoronavirusEl AlLaborpilots

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