El Al Losses Quadrupled in Final Quarter of 2020

The airline's 2020 loss swelled to $531 million from $60 million in 2019

Reuters
Reuters
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An Israeli El Al Boeing 787-8 Dreamliner aircraft on the tarmac at Ben-Gurion Airport two weeks ago.
An Israeli El Al Boeing 787-8 Dreamliner aircraft on the tarmac at Ben-Gurion Airport two weeks ago.Credit: Jack Guez / AFP
Reuters
Reuters

The coronavirus pandemic led to a huge loss at El Al Airlines in the final three months of 2020, but the airline said it was working on a recovery plan to emerge from the crisis.

Israel’s flag carrier said on Thursday that it lost $140 million in the October-December period as it operated just a handful of flights, versus a net loss of $31.5 million a year earlier. Revenue fell to $111.6 million – $73 million coming from cargo activities – from $518 million. For all of 2020, when COVID-19 closed Israel’s borders to foreigners and significantly curtailed the carrier’s operations, El Al’s loss swelled to $531 million from $60 million in 2019.

Last week, the government agreed to a $210 million bailout of El Al, which changed ownership last year and was forced to slash one-third of its staff, or 2,000 workers, and other costs. The state also required new owner, the American-Israeli Eli Rozenberg to inject more cash into the airline.

El Al, which also has a new board and management, has reported losses for two years and racked up debt to renew its fleet. It suspended scheduled passenger flights last March when Israel closed its borders to most foreign citizens, compounding its financial woes.

Israel has begun to open up some international routes again to its citizens but on a limited basis, citing concerns over new coronavirus variants but it was unclear when tourists would be allowed to return.

Cyprus has recognized Israel's "green passport" for vaccinated citizens, and will open the country to Israeli tourists on April 1, a move that comes after Greece lifted the cap on Israeli tourists, but reinstated COVID test requirement.

El Al CEO Avigal Soreq said that along with the efficiency plan and a gradual increase in operations in 2021, the airline was working on a multi-year plan to emerge from the crisis.

The government has struggled to find a way to keep Israel’s flagship carrier afloat after the coronavirus pandemic struck a year ago and brought world aviation to a standstill. The company last September changed ownership when the American immigrant Eli Rozenberg acquired a majority stake upon the airline’s raising of equity capital. The airline is undertaking a massive cost-cutting program, but the outlook for world travel remains poor.

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