El Al Won't Fly Until at Least the End of September, Yet Still Attracts New Investor

National carrier El Al extended the suspension of flights until the end of September. The unpaid leave of employees of its subsidiaries will also be extended through this period. In parallel, Israeli-Russian businessman David Sapir submitted a request to El Al to acquire shares.

El Al attributed the extension to coronavirus regulations which ban tourists and oblige returning Israelis to quarantine, save for a few destinations. The company stated that it is operating cargo flights on a limited basis.

The report comes on the heels of a July 16 report on the temporary halt of regular passenger flights through August. El Al said 6,080 employees are on unpaid leave, compared to 6,100 as of July 16.

El Al is supposed to issue an offering to raise $150 million by the end of August, based on a Finance Ministry decision. These funds are vital to cover its $80 million debt to Israelis who purchased tickets for flights that were canceled, and to restart the airline.

“The main decision to open the skies is welcome and is a first and important step,” wrote CEO Gonen Usishkin to the workers to explain the decision to extend the unpaid leave. “This stage involves exempting Israelis returning from green countries from having to quarantine, but the distance from restarting regular flights in a meaningful way is great,” he added, referring to countries that are considered to have the coronavirus under control.

Usishkin acknowledged employee frustration and uncertainty over the status of their jobs, noting that he is dedicated to making El Al “stable and safe in the face of the new reality of competition, regulation and other challenges.”

Meanwhile, businessman David Sapir submitted a request to the El Al secretariat to acquire shares of the airline. The request is a technicality before submitting a request to the Government Companies Authority to receive permission to buy either 25-40% of the company or over 40%.

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Sapir, who has joint Israeli-Russian citizenship and holds a medical degree, is active in Germany and Russia in the fields of communications, infrastructure and technology. Sapir asked for an expedited process, given El Al’s intention to issue the offering at the end of August.

Sapir joins real estate tycoon Meir Gurvitz, controlling owner of Arazim Investments Ltd., which submitted a similar request last week, and Eli Rosenberg, who already received permission to acquire 40% of El Al.

Representatives of Rosenberg, who proposed to the board to inject $75 million into the company for a 44.99% stake, met Tuesday in the office of attorney Avigdor Klagsbald, who represents El Al. The requests were submitted against the backdrop of the offering, in which the state pledged to buy up remaining shares not purchased by the public.