Analysis |

Grounded Flag Carrier El Al Is the Perfect Parable of Israel's Coronavirus Predicament

A champion of resilience during wars, El Al probably won't be allowed to go out of business over COVID-19, but its grounded planes stand as a symbol for the thousands of small businesses that will

Anshel Pfeffer
Anshel Pfeffer
The tail ends of Israeli El Al airline aircraft are seen on the tarmac at Israel's Ben Gurion Airport in Lod, east of Tel Aviv, on July 7, 2020.
The tail ends of Israeli El Al airline aircraft are seen on the tarmac at Israel's Ben Gurion Airport in Lod, east of Tel Aviv, on July 7, 2020.Credit: AFP
Anshel Pfeffer
Anshel Pfeffer

Ben-Gurion International Airport is slowly, very slowly, reopening Israel’s connection with the world.

LISTEN: Protests, pandemics and Netanyahu's day of reckoningCredit: Haaretz

At this point, it’s still only a few hundred people flying every day but a number of major airlines have already resumed limited service, alongside the European low-cost carriers Ryanair, Easyjet and Wizzair.

One concourse at Terminal 3 is operational and there’s even one café and a small duty-free shop open there.

Employees of Israeli flag carrier El Al Airlines take part in a protest asking for recovery plan for the cash-strapped airline, in Jerusalem, on May 10, 2020.  Credit: Ronen Zvulun/ REUTERS

Since many countries have yet to allow Israelis to enter, and even for those who do (with or without isolation requirements), upon return to Israel, you’ll need to spend two weeks of isolation, demand isn’t very high.

Most planes are still taking off or landing three-quarters empty and the passengers are mainly Israelis with dual-citizenships flying to join their families abroad or foreign citizens who work in Israel. But those who can, and need to do so, can now fly from Israel, direct, to over twenty countries, at least once a week.

But as it begins its long long-haul journey to recovery, one constant feature of air-travel to and from Israel is still absent. El Al, the national flag-carrier, is grounded indefinitely.

All 45 aircraft in the El Al fleet are parked on the tarmac at Ben-Gurion. They haven’t moved for two weeks now, except for a few routine maintenance procedures on the ground, carried out by a skeleton staff of a hundred technicians, the only El Al employees not to have been furloughed.

With the exception of a four-month strike back in 1982, this is the only time El Al has grounded its fleet for a lengthy period. Indeed, the idea of severing Israel’s air-link to the world is anathema to a company whose ethos is that it always keeps flying, even during times of war, when all other airlines cancel their services.

Indeed, if the latest crisis had been caused by missiles landing on Israel’s cities, you can be sure that El Al would be up in the skies and flying, despite it all. It did so time and again in the company’s history. Until COVID came along.

El Al is the perfect parable for Israel’s current chaotic situation in confronting coronavirus. A country and a company with extensive experience of continuing operations in the face of war and terror, which is totally unequipped to do so in time of a global pandemic.

Employees of Israeli flag carrier El Al Airlines take part in a protest in Jerusalem, on May 10, 2020.  Credit: RONEN ZVULUN/ REUTERS

Ostensibly, El Al is currently grounded due to an industrial action by its pilots union. Until two weeks ago, the company was operating a small number of flights to a few destinations including New York, London and Paris, and also fulfilling a short-term cargo contract, using its unused passenger planes to fly urgently needed medical and protective equipment from factories in China to destinations around the world.

But those pilots who were actually flying, were instructed by the union not to make themselves available for their next flight. The move was planned in response to the plans being prepared by management, which would have seen hundreds of pilots laid-off and the salaries of those remaining slashed. In response, El Al’s shareholders decided to ground them all.

The company’s future is unclear. No one wants to contemplate El Al going out of business and the government has made at least two proposals, to guarantee long-term loans or buy out the shareholders and nationalize the company until the crisis is over.

There’s also a mystery buyer, Kenny Rozenberg, a care-center tycoon from the U.S., who in order to overcome the requirement that El Al’s owners reside in Israel, is proposing to purchase control of the company through his son, a yeshiva student in Jerusalem.

Passengers wearing masks push trolleys at the departures terminal at Tel Aviv's Ben Gurion International Airport, on May 14, 2020. Credit: RONEN ZVULUN/ REUTERS

But the uncertainty over El Al’s future ownership isn’t the only reason the planes are not taking off. The entire airline industry is facing its worst-ever crisis without a clear end in sight. So why are foreign airlines landing and taking off at Ben-Gurion, even with just a dozen or so passengers, while El Al remains on the tarmac?

While El Al has only one Israeli hub, most of the other airlines flying to Ben-Gurion have multiple hubs, or are based in countries where air-travel, both domestic and international, is beginning to pick up.

Operating even a much downsized fleet than usual, means these companies have the capacity to offer a range of flights, some profitable. They can face the losses incurred by flying to less profitable destinations, in the hope that business will soon pick up there as well.

But El Al currently faces losses on all its destinations (and with the return of the other airlines, has much less cargo business).

A view of the departure check-in counter for Israeli El Al airline, empty, at Israel's Ben Gurion Airport, on July 7, 2020.Credit: AFP

As long as COVID-19 infection rates are high in Israel, other countries will not be opening their borders to Israeli tourists or business travelers. And since upon return, Israelis will need to spend another fourteen days in isolation, flying off to countries without restrictions, such as Turkey, Britain and the U.S., is not an attractive prospect either.

There is no way any of El Al’s flights can be profitable for the foreseeable future and this crisis has come at a period when El Al is over-extended, having just bought its largest and newest fleet ever, with over half the aircraft, including fifteen new Boeing 787 Dreamliners, arriving in the last four years.

The government aid packages are insufficient to cover the losses and the nationalization proposal comes with the demand for significant lay-offs and pay-cuts. The government can justify spending hundreds of millions of taxpayers’ shekels to keep El Al in business, but not to keep on paying the pilots’ salaries, some of the more veteran long-haul ones, in the six-figures, when most of them won’t be flying for the coming months anyway. So the pilot’s are striking and the company is grounded.

Of course, if there was an actual war on, none of them would dream of striking. They would all be in the air, some flying for El Al, and the rest as reserve combat-pilots with their squadrons in the air-force.

Israeli El Al planes are parked at Ben Gurion Airport near Tel Aviv, Israel,March 2020.Credit: Ariel Schalit,AP

So while the entire global airline industry is hurting, El Al’s predicament is worse than most as it is reliant on one, very narrow and isolated market.

Israel is an “island economy,” with very little economic relations with its geographical neighbors, even those with which it has diplomatic relations, and over ninety-five percent of entries and departures from Israel by air, and nearly all of those through Ben-Gurion.

Of course, when the pandemic began, it seemed that Israel’s unique geopolitical situation could help it overcome the crisis relatively unscathed and quickly.

The government could easily close the borders and keep track of virus-carriers who had entered while the country quickly went into lockdown, keeping infection rates down and opening the way to a speedy recovery.

That’s what happened with another, real island economy, New Zealand. But the mismanagement of the second stage of COVID-19 and lack of an exit strategy meant that early advantage was squandered.

Israel is now facing a second lockdown and the number of passengers going through Ben-Gurion won’t grow. El Al probably won’t be allowed to go out of the business in this time, but the static rows of blue and white planes, shining immobile in the sun, will symbolize the thousands of small Israelis businesses which will.



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