Netanyahu vows support for El Al as it starts layoffs amid virus fears
Airline axes some 160 incoming workers, puts a halt to new hires, as its labor union calls for emergency assistance in light of massive revenue losses from coronavirus outbreak
Luke Tress is The Times of Israel's New York correspondent.
Prime Minister Benjamin Netanyau on Sunday vowed support for El Al airlines as it started laying off employees as the company continues to suffer massive losses in revenue due to the coronavirus outbreak.
Some 100 trainees in El Al’s flight attendant program were forced to turn in their company ID cards Sunday and told the training course was halted, and the airline axed 60 pilots who were set to begin flying for the company. El Al also froze hiring of new employees.
On Thursday, the airline said it was formulating a plan to fire some 1,000 people, nearly one-sixth of its workers.
The company’s announcement on the planned firings were seen as part of a negotiation tactic in talks with labor representatives; the announcement of the plan likely does not actually mean that 1,000 people will be fired. The company employs some 6,300 people, 3,600 of whom are permanent workers.
The El Al union, also known as its workers’ committee, was reportedly surprised by the scope of the firings plan, despite the company’s earlier warnings that the virus outbreak would cause tens of millions of dollars of revenue losses.
The committee is said to be exploring options for reducing the company’s workforce without axing employees, including by giving up on paid vacation days and reducing the number of shifts people work.
Hundreds of El Al employees held an emergency meeting Sunday, demanding government assistance for the beleaguered airline, the Globes business daily reported.
The airline said in a statement: “As the company copes with the consequences of the coronavirus crisis, as part of the process of adapting the company workforce, a message was issued to El Al pilot trainees, stewards and ground crews that El Al has halted their certification process, and they would not be hired as company employees at this time.”
“Additionally, the company is making adjustments, including the halting of courses for stewards and ground crews that were supposed to start soon. It should be noted that there will not be new hires to the company until further notice,” the company said.
Netanyahu told the head of the workers’ committee, Sharon Ben Itzhak, that he had assigned a ministerial committee to help El Al and other Israeli airlines.
“I appreciate the work you do, and we will help you and care for El Al,” Netanyahu said. Transportation Minister Bezalel Smotrich also vowed to aid the airlines.
A government committee, including Tourism Minister Yariv Levin and representatives from the Finance Ministry, met on Sunday to discuss possible compensation for the travel and tourism industries. The government is not expected to provide cash handouts, but to provide indirect support, for example, by postponing payments to the government, and by providing marketing assistance, the Calcalist business daily reported.
Arnon Bar David, head of the Histadrut umbrella labor union, said: “We’re in a state of emergency. All the authorities need to act to prevent the collapse of El Al and the other airlines. I will tell all the committees to fly with only Israeli companies.”
Bar David requested NIS 50 million from the Finance Ministry for the airline, Channel 12 reported.
The government holds shares in El Al and sees the company as a strategic asset, and government restrictions are partly responsible for it financial woes. Aid to the company could come in the form of cash or in the form of tax breaks. The airline pays some $100 million in taxes per year.
El Al has not submitted a plan for compensation, but has formed a committee to determine the scope of financial damage.
The airline might also be hoping for the government to cut back on restrictions against its flights — it is not allowed to fly over Saudi Arabian airspace, or to fly to Turkey, for security reasons, while foreign airlines operating out of Israel are allowed to.
Some employees are in self-quarantine already, according to Health Ministry guidelines, after returning from countries hit by the virus.
El Al told Israeli investors on Thursday that the company expects to see a loss of $50-70 million in revenue between January and April. The figure did not take into account the halt to flights from Italy. The airline’s shares on the Tel Aviv Stock Exchange have fallen 20% since the start of 2019.
It is also dealing with a wave of cancellations of tickets for the summer holidays and Passover vacation, and needs to pay for recently purchased Dreamliner planes.
El Al on Thursday said it was suspending flights to Italy and Thailand due to the virus, and that it would delay its planned launch of direct flights to Tokyo until April. The airline extended its halt of flights to Beijing and Hong Kong until May. It has been offering customers the ability to cancel their tickets with little notice.
In one bright spot for the airline, fuel prices have dropped worldwide due to a decrease in demand as the virus rocks the global travel and transportation industries.
Israel has implemented a strict border control regime to stem the flow of the virus, banning foreigners who were recently in China, Hong Kong, Macau, Thailand, Singapore, South Korea, Japan and Italy, and ordered Israelis returning from those countries to self-quarantine.
The Health Ministry urged Israelis Wednesday to seriously consider refraining from traveling abroad, becoming the first country to issue such an advisory.
Israel has had 10 confirmed cases of the disease and no deaths.
The coronavirus, which emerged in China late last year, has killed 3,000 people and infected over 88,000 in over 60 countries. The vast majority of infections and deaths have been in mainland China.
The Times of Israel Community.