Israel’s Finance Ministry Refused A Bail Out For El Al

Israel’s Ministry of Finance turned down El Al’s request for a $350 million government-backed loan. In explaining the decision, the finance ministry said it “did not believe El Al would be able to repay” the money.

In response, the airline said that “State support in the near term is essential to allow the company to cope with the consequences of the coronavirus crisis.” And as a result they’ll be asking the government for its “requested aid package” again.

Officials believe the airline’s assumptions about its return to routine and future revenue were unrealistic. The Finance Ministry expects the aviation industry as a whole will have a much later recovery than El Al’s forecast.

El Al has suspended all commercial flights and is operating only cargo and government-sponsored repatriation flights.


El Al Boeing 787-9 On Approach At Newark, Credit: Adam Moreira via Wikimedia Commons

American Airlines CEO Doug Parker shares that the turning point for his legacy was convincing the federal government to provide subsidies to America West, after rejecting his first application in 2001. We’ll see if Israel gives El Al CEO Gonen Usishkin a similar legacy (and opportunity to ruin more airlines).

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. Gary – El Al is holding passengers’ cash for tickets on flights they’ve cancelled (US-TLV), including mine. Will not even issue a voucher/credit until “a future time” (which was stated in my cancellation email). Have disputed charge, bank gave me a provisional statement credit but said they can’t resolve case in my favor until El Al communicates with them, which they haven’t of yet. Let me know if anything i can do beyond file a DOT complaint and twiddle my thumbs.

  2. Round trip from MIA to TLV with EL Al is much more expensive than America Airlines… almost double the price.

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