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Budgeting, streamlining and service: the step-by-step plan for rescuing El Al from the crisis
The new board of directors of the former national airline, which is at a significant low point in its 72 years, has formulated courses of action through which the company will try to rehabilitate its operations.
To this end, the outline of assistance will be completed, debts will be settled, and efforts will be made to restore customer trust and improve service.
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EL AL
Corona virus
Keenan Cohen
Wednesday, October 21, 2020, 10:41 PM
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In the video: El Al's meeting room after a board meeting with the pilots' representatives and the chairman of the Transportation Association (edited by Nir Chen)
In the biggest crisis the aviation industry has known, with a vague horizon for the industry to return to activity - El Al is at a significant low point in its 72 years, with regular cessation of activity for eight months, of which those went through complete silence.
Now, following the takeover of the airline by "Wings of Eagles", a new board of directors has taken office, headed by David Brodet, who previously served as director general of the Ministry of Finance, chairman of the YES satellite broadcasting company and Mizrahi and Leumi banks.
For the first time since his appointment, he lists the three main steps on the way to the company's exit from the crisis and the challenges that await it beyond it - budgeting, efficiency and service.
For the company, which has entered a crisis with huge debts and huge loan leverage, the first step should be stabilization in terms of cash flow and the company budget.
The way to do this, is by outlining the aid where the company is located.
Under this outline, the company will be provided with state-guaranteed loans in the amount of $ 250 million, with an additional $ 150 million to be raised through an issue of the company's shares to the public.
The company has not yet reached final agreements with the lending banks.
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Three main steps on the way out of the crisis.
El Al plane takes off (Photo: Ofer Hajib)
New Chairman of the Board David Brodet (Photo: Uri Lenz)
Another task facing the company is to meet the company's efficiency plan.
According to Brodet, the implementation of this program is the key to dealing with modern aviation businesses in the face of global giants.
These streamlining measures relate, among other things, to the new employment agreements signed with three of the company's four major committees (stewards, maintenance and management), when an agreement was signed with the pilots in the absence of their representatives between the company and the Histadrut, and their petition was rejected by the court yesterday.
The bottom line, for workers, is a cut of about a third of the workforce, which stood at about 6,300 before the crisis.
Customer trust and service improvement are also items that the new board understands that the company must improve on.
According to the reputed Skytrax website, which publishes world airline ratings, El Al scores 5 out of ten, along with companies such as Egyptian Egyptair, Polish LOT, United Arab Emirates, Alitalia and others.
For the sake of comparison, Lufthansa and Swiss with the same score of 6, Corian Air with a score of 8. At least at the level of official statements, the new board of directors expect the company to stand optimally are meeting and arrival times.
According to Brodet, a "meticulous and quality" service includes safety, security (a clause in which the company leads by a significant margin) and in accordance with the current reality - also health.
A chance of only 1 in 27 million for infection in Corona
These are not the only challenges facing the company.
Even now with the partial return to activity, El Al understands that a return to activity in volumes that were known before March, is not expected any time soon and by the time we get there, there is a long process of overcoming the virus.
However, even until the situation returns to normal, the company understands that internationally agreed routes must be built for passenger traffic between countries without isolation - but with the use of rapid test systems.
In a letter to the company's employees, the incoming chairman of the board noted data from the International Air Transport Association (IATA), according to which during the Corona period only 44 people were infected during flights (ratio of one in 27 million passengers).
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To the full article
Building on a gradual repetition.
Passengers at Ben Gurion Airport last summer (Photo: Reuven Castro)
Between speed tests and streamlining and additional money flow, the company is also currently in a difficult situation, when it is required to return a sum of more than a billion shekels to customers whose flights have been canceled.
The company admitted to the Consumer Subcommittee that they had difficulty doing so before the company received financial aid.
The gradual return in recent weeks to flights to "green" destinations, and the expansion seen in this activity in the coming weeks, along with the reopening of more and more flight lines, bring a sense of "business as usual", but they are far from telling a full return to routine.
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