Borovich: 'I am not planning to sell my El Al shares'
"I have no intention of selling my shares in El Al. The company can overcome all its difficulties. CEO Haim Romano will come to an understanding with the workers' representatives. All the noise in the system will end and we will move El Al forward." These comments were made yesterday to TheMarker by El Al chairman Israel Borovich, in his first public discussion of the crisis affecting the airline.
Rumors are rife in the aviation industry of Borovich's interest in selling at least part of his stake in El Al. TheMarker has learned that the Nakash brothers, controlling shareholders in Arkia, have expressed an interest in acquiring Borovich's El Al shares. They secretly obtained professional advice on the economic feasibility of such a purchase despite the obstacles that the Antitrust Authority would be likely to put up.
"That's ridiculous," Borovich said in response to the rumors. "I saw one of the brothers in London once and met the other one in Israel on another occasion. I have a great deal more to do with El Al, myself. I'm only 65. Do you think I'm going to sell my shares and go to the beach?"
Borovich pressed on: "It would be stupid to sell the shares today. In another two years, El Al's shares will double their value; that's my goal at least. I don't intend to sell my shares and I do intend to stay on for several more years as chairman of the board of El Al."
Arkia spokeswoman Galia Pontremoli said in response to TheMarker's question about the acquisition rumors, "The Nakash brothers are among Arkia's shareholders who are involved in the company's development and growth."
Borovich recently returned from an international conference of European airlines. "My policy at El Al is to obtain cooperation agreements, including codesharing, with foreign airlines," Borovich said. "The goal is for El Al to be an airline that flies from point to point and beyond, via foreign airlines, to a variety of other destinations. This model works very well in India, with Jet Airways, and my intention is to expand these partnerships with additional airlines in Europe and the United States, from destinations such as new York, Los Angeles and Miami.
"We will do the same in China, too. The vision of the strategic aviation alliance did not prove to benefit the smaller partners in such alliances. One example of this is the big airline, Lufthansa, which profited while its smaller partner, Austrian Airlines, lost."
Meanwhile, El Al yesterday launched a new all-inclusive package to several European destinations called El Al Weekend.
"This is part of the company's new strategic plan, El Al 2010, with complementary products that give customers a total package on one hand while expanding our revenue stream on the other," the airline's CEO, Romano, said.
The packages include not only flights, but accommodation too, as well as a range of activities such as sporting events, theater and tours starting at $439. The new offerings will begin tomorrow and run through the 2006-07 winter season, with trips to major European cities.
El Al is opposed to the Civil Aviation Authority's request for changes to the tariff schedule imposed on airlines, which the company claims will double its fees to the authority from NIS 3 million to NIS 6 million annually.
The Knesset Economics Committee will be debating the issue today.
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