El Al cuts passenger flights to 4 per day, puts most workers on unpaid leave
Some 5,500 employees released until at least end of May as company prepares to request massive loan to weather pandemic
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El Al on Tuesday put some 5,500 workers on unpaid leave after its labor union gave up on opposition to the move, as travel and tourism to Israel have essentially halted completely due to the coronavirus pandemic.
Only around 1,500 employees will continue working as usual. The measure will extend at least until the end of May.
El Al also said Tuesday that it was further reducing passenger flights to only four per day — two to New York or New Jersey, one to Paris and one to London, plus one weekly flight each to Toronto and Johannesburg.
Talks between the union, also called the workers’ committee, and the company’s management have progressed in recent days, but were stalled over the airline’s plans to fire 600 permanent workers, which is part of its streamlining proposal required by the Finance Ministry.
Despite an El Al statement earlier this month saying it was axing hundreds of workers, no action was actually carried out due to opposition from the labor union, the Calcalist business daily reported.
In a meeting with Finance Ministry officials last week, El Al management was told that the company needed to put in place streamlining measures in order to receive a loan.
The Finance Ministry ordered El Al to cut yearly costs by $200 million, partly through layoffs and salary reductions.
The loan requested by El Al, reportedly amounting to some $700 million, will not be provided by the government, but by a bank that will approve the company’s plan and ensure its repayment, Calcalist reported.
The workers placed on leave will retain most of their rights. For example, the airline will continue to set aside funds for their pensions, health insurance and car expenses for those who are eligible.
The employees could also do private work without any permits from the company.
In addition to carrying passengers, the airline conveys around 35 percent of all of Israel’s aerial imports and exports. Around two-thirds of Israel’s exports are carried by plane, and around one-third of all imports.
Prime Minister Benjamin Netanyahu announced new restrictions to stem the virus outbreak on Monday night, and the Health Ministry announced new more drastic measures on Tuesday.
The Finance Ministry estimated Monday that the total damage to Israel’s economy caused by the coronavirus pandemic will amount to NIS 45 billion ($12 billion) and wipe out any projected growth for the year.
The government on Monday ordered all businesses with more than 10 people to curb in-office staff by 70% and put the public sector on emergency footing, adding to measures that had already largely curtailed much of Israel’s economy.
The widened restrictions came after the Health Ministry voiced support for a total lockdown of the country. Treasury officials, by contrast, have been strongly opposed to a full shutdown.
The Health Ministry on Tuesday instructed Israelis to remain home unless it was absolutely necessary to leave. The Transportation Ministry said it was reducing public transportation at night and on weekends.
So far, 324 cases of COVID-19 have been confirmed in Israel. Five were in serious condition and nine in moderate condition.
Israel has banned gatherings of over 10 people, closed schools, forced all Israelis entering the country into a 14-day quarantine, and ordered the closure of all malls, restaurants and cafes (with takeout permitted) to contain the outbreak.
The Times of Israel Community.