El Al Demanding Compensation for State's Use of Its Planes During the War

State commandeered three of five cargo jets to fly in ammo; and there's the cost of lost income

As the Lebanon II war raged on, the Israeli army's supply of armaments needed replenishing. Attacks from the air, sea and ground needed to be fed and the government recruited El Al cargo jets to bring the supplies from the U.S.

It was the first time since El Al's privatization that the state had exercised the powers conferred under its golden share, to commandeer the fleet at a time of emergency.

"Some of the flights were for pay, at the order of the Defense Ministry, and some were 'recruited' without financial recompense," explains an El Al officer.

The airline must keep a minimal fleet available precisely for national need. Not all its cargo fleet was commandeered by the army: only three out of five cargo jets, says the source. But now that the cannons have stopped roaring, and don't need supplies any more, the airline wants compensation. Tens of millions of dollars of it.

Much of that is based on lost income from its cargo jets. In a letter to the finance minister, which TheMarker has obtained, El Al - now owned by the Borovich family - lists the damage it suffered.

At the end of the letter, CEO Haim Romano writes that the development of circumstances requires the government to help 'the Israeli airline' survive under the harsh circumstances created.

El Al also suffered harm from the war's impact on tourism, which basically vanished. Also, experience teaches that such harm is not short in term: when tourists are frightened away by war, they don't hurry back.

Also, less Israelis flew abroad in the peak period of summer, exacerbating El Al's pain, while meanwhile its costs remained fixed, Romano explains.

El Al adds that it incurred extra costs because of the war, such as added security costs, and change in takeoff routes because of Air Force activity.