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).