In Strike-ending Deal, El Al Gets First-class Treatment

As Israel's biggest airline and a security provider for its competitors, El Al will benefit the most from the boost in state security funding.

El Al will be the main beneficiary of the $130 million the state is giving Israeli airlines to cover security expenses as part of the deal that ended the strike by airline and airport employees Monday.

Customers of El Al whose flights were canceled due to the srike will also see some benefit, as the airline is offering them free flights to Europe.

Of Israel's three airlines, El Al has the largest share of operations at Ben-Gurion International Airport. In 2012, it was responsible for 33% of all international traffic at the airport. It also provides security services for Israir and Arkia.

The deal penned by the Finance Ministry and El Al, Israir and Arkia increases the state's contribution to the local airlines' security expenses. The concession followed pressure from the airlines in response to the Open Skies agreement with the European Union, which the cabinet pushed through Sunday. The agreement opens Israel's airline industry to competition from Europe over the course of several years.

Currently, the state covers 70% of the airlines' security expenses. Under the new deal, it will be covering 97.5%, which works out to $130 million per year. In exchange for the sweetened deal, the airlines agreed to end the strike that grounded their fleets Sunday and Monday.

El Al apologized Monday to passengers affected by the strike and announced it is granting those whose flights were cancelled as a result free flights to Europe.

"Some 12,000 passengers were affected by the day-and-a-half-long strike," said El Al's Vice President of Commercial and Industry Affairs David Maimon. "The responses on Facebook – authentic as they were – cannot be quoted, because they were harsh and full of hate, but there were also lots of shows of support. The people love El Al, and I have no doubt that its reputation was harmed a bit, but we know how to repair it."

While Maimon said it is too early to say how much the strike cost El Al, industry estimates are that the airline lost NIS 1.5 million in revenues and incurred NIS 4.5 million in costs per day.

Maimon said El Al's call center was under pressure from people looking to reschedule their flights and that people should wait until May 12 before calling about their free flights to Europe. "I believe we'll get the number of calls under control very quickly," he said.

Olivier Fitoussi