Israel to bail out its airlines with $210 million COVID-19 aid plan wkzo.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from wkzo.com Daily Mail and Mail on Sunday newspapers.
Treasury agrees terms for $210m grant to El Al
After rejecting the rates the banks wanted to charge El Al for a loan, the Finance Ministry will pay the airline an advance on its security services.
Israel s Ministry of Finance has agreed the details of the state s rescue package for El Al Israel Airlines Ltd. (TASE: ELAL).
The Ministry of Finance will transfer $210 million as an advance to the financially ailing airline for airline security services in the coming years. In addition, El Al has committed to raise another $105 million through a public offering with controlling shareholder Eli Rozenberg committed to buying at least $43 million of the shares. El Al has also agreed to implement its streamlining plan, which will result in savings of $400 million in the coming years.
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TEL AVIV (Reuters) - Israel’s government announced on Wednesday a long-awaited bailout of its airlines to help them weather the coronavirus crisis and maintain operations in the midst of a year-long halt to international travel.
El Al Israel Airlines planes are seen on the tarmac at Ben Gurion International airport in Lod, near Tel Aviv, Israel March 10, 2020. REUTERS/Ronen Zvulun
As part of a financial assistance program overseen by the finance ministry, the government will buy $210 million-worth of flight tickets in advance from flag carrier El Al Israel Airlines and its low fare subsidiary Sun Dor.
The tickets are for the airline security personnel posted at airports that its carriers will fly to over the next 20 years, the finance ministry said in a statement. The sum will stay the same even if security requirements change.
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El Al begins 2,000 layoffs
Hundreds of non-tenured workers have received dismissal notices as the airline cuts its workforce as a precondition for a state loan.
Hundreds of El Al Israel Airlines Ltd. (TASE: ELAL) employees received letters summoning them to a hearing prior to being dismissed. In the first stage, employees who have no tenure, which includes most of the cabin crew, are being dismissed.
El Al said, As part of the streamlining program, El Al is announcing at a critical juncture on the way to receiving a loan from the state that the company has sent dismissal notices to hundreds of temporary employees only at this stage. The company s employees will remain on unpaid leave until at least March 31.