CEO of El Al Submits Sudden Resignation

David Maimon oversaw turbulent times at Israel's national airline since assuming control in March 2014; has committed to stay on until replacement is found

David Maimon speaks during ceremony marking the arrival of the first of the airlines order of 16 Boeing 787 Dreamliner jets, at Ben Gurion International Airport, Israel August 23, 2017.
AMIR COHEN/REUTERS

El Al CEO David Maimon submitted his resignation to the Israeli flag carrier’s board of directors on Tuesday, after three and a half years in the position.

Maimon, 57, had served eight years as the airline’s commercial vice president prior to becoming its CEO and president in March 2014.

It is thought the resignation is the result of a combination of factors, including the strain over recent friction between the airline’s management and its pilots, the involvement of shareholders in the company’s management and the state of Maimon’s health.

In his resignation letter, Maimon said he would remain at the helm until a replacement is found and provide the necessary on-the-job training.

It’s reasonable to assume that possible candidates to succeed Maimon will include Uri Sirkis, CEO of the Israeli carrier Israir, as well as Yehudit Grisaro, El Al’s vice president for human resources, who had been the airline’s vice president for customer service.

It is also expected that Eli Defes, the current chairman of the El Al board and a former CEO of the Clalit health maintenance organization, will wish to stay on at the helm of the board.

During the early part of his tenure as CEO, Maimon had the good fortune of heading the company during a period when fuel prices – a major outlay for airlines – fell 73%, hitting bottom in February 2016. Since then, though, fuel prices have risen 118%.

El Al has also had to face rising competition, notably from discount carriers and airlines, including Turkish Airlines, which have been flying passengers from Israel to onward destinations via the airlines’ hubs.

El Al has encountered trouble meeting demand due to staff shortages and relatively old aircraft, though it’s currently taking possession of new aircraft.

It has lost market share and been forced to use leased aircraft, exacerbating relations with the carrier’s pilots.

For a spell during Maimon’s tenure as CEO, the airline was forced to cancel flights due to strike action by pilots and to lease foreign aircraft to transport some passengers. This summer, the carrier also began taking possession of what will eventually be a fleet of 16 Boeing 787 Dreamliner aircraft. Two of them are currently in service.

About 18 months ago, El Al began flying between Tel Aviv and Boston, and has just inaugurated a service between Tel Aviv and Miami as well. Under Maimon’s tenure, El Al also inaugurated its Fly Card credit card, which is the country’s largest credit-card program in which the cards are not issued directly to customers by any of the country’s banks.

In his confrontation with El Al’s pilots, Maimon managed to reach an agreement shortening the stays of pilots abroad as well as the scheduled time of flights, particularly between New York and Tel Aviv. Signed in 2016, the agreement provided the pilots with a 7.35% pay raise, cumulatively amounting to 15 million shekels ($4.3 million) a year. The carrier also committed to stop leasing foreign aircraft in exchange for a commitment by the pilots to stop disrupting the flight schedule.

The agreement on shorter flight times to New York addressed a practice by pilots to artificially lengthen the flights because it earned them overtime. The agreement also put an end to a perk the pilots had been enjoying to have a family member fly business class.

Maimon also steered the carrier to a new agreement with maintenance staff, who represent some 20% of the airline’s workforce. The maintenance workers were given a 5% raise in return for certain cuts and outsourcing of services, as well as the elimination of Friday shifts that were mainly a way for the workers to earn overtime, even if their services were not actually required.

Maimon’s resignation comes four months after the signing of a memorandum of understanding over a merger of El Al’s Sun d’Or subsidiary and Israir, which is owned by IDB Tourism. Sun d’Or will acquire control of Israir for a maximum of $24 million and the transfer of a 25% stake in Sun d’Or to IDB Tourism.