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Passengers, Pilots and Competition: The Challenges of the New Landlord at El Al
Eli Rosenberg ousted Tami Mozes and became the controlling owner of the Israeli airline, but he does not have a single moment of grace.
Almost on every front, many challenges await him, and in the back, competition is blowing
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EL AL
Michal Raz Haimovich
Monday, 21 September 2020, 05:54
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On the eve of the holiday and at the age of only 26, Eli Rosenberg became the owner of El Al.
But in the situation of the airline, he does not have even a single moment of grace.
Rosenberg has invested about $ 100 million in the Israeli airline's issuance and purchased about 43% of the shares, but it is clear to both him and his father (American businessman Kenny Rosenberg) that this is an amount that will not necessarily provide to rehabilitate the company.
After raising a total capital of $ 150 million, El Al is expected to raise a debt of an additional $ 250 million (according to the agreement with the state) when so far the company has not been able to obtain approval from financing banks.
At the same time, on October 1, the date on which, according to the law, El Al must return to the ticket buyers about NIS 1 billion for canceled flights.
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In front of the passengers, another major challenge awaits - to restore the damaged passenger confidence.
Since the outbreak of the corona in March, the company has not provided a service, and has contented itself with an automatic response to applicants that they will be treated when the company resumes operations.
This was at a time when foreign airlines and Israir continued to offer flights to the Israeli public.
El Al must now correct this service injustice and understand that the competitive arena in the day after the corona will be more challenging than before, especially when UAE airlines are expected to enter the Israeli market and compete aggressively for flights to the Far East as well.
Another front that awaits the new controlling shareholder is the relationship with the employees.
The pilots' committee is in dispute with the management and is awaiting the tribunal's decision regarding the collective agreement signed by the Histadrut, which they claim is "over their heads."
El Al's management has signed agreements with the four committees representing the various sectors of its employees as part of an efficiency process, which is a condition for assistance in the outline approved by the government.
This streamlining will include the dismissal of about a third of the company's employees, whose number is about 6,300.
El Al has announced that it will gradually resume its flights from September 21 and in the process has updated that it is extending the workforce until the end of October. A critical task for the new controlling shareholder is to restore relations with the pilots Sitting at home for half a year.
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