El Al: Cost of Flights Cancelled Due to Pilot Protesters Is Minimal

Airline forced to cancel flights and lease aircraft and crews from abroad as pilots protest ban of so-called split flights.

An El Al Boeing flies over the clouds.

El Al Airlines’ direct losses from canceled and delayed flights caused by a dispute with pilots over the last week have amounted to no more than 5% of the revenues it expects to earn in the current quarter, sources said on Monday.

With the carrier’s fourth-quarter revenues at $476 million that would amount to about $24 million to date. The estimate came after El Al said in a statement to the Tel Aviv Stock Exchange earlier in the day that the labor strife would not have a significant impact on the company, but did not specifiy figures.

“The disruptions have been reflected — beyond damage to the company’s reputation — in higher operating expenses ... and lower income from airfares, though the monetary amounts are not significant to the company as of now,” El Al said. Its shares closed up 2.4% to 3.44 shekels (89 cents).

The reassurances came as labor strife at Israel’s flagship carrier escalated this week, with unions meeting late on Monday to decide whether to declare a labor dispute, which would allow them to strike in two weeks.

The pilots’ slowdown is to protest a management crackdown on so-called split flights in which pilots fly only one way on a roundtrip flight and get paid to fly as passengers in business class on the return. In the past two weeks, management has cracked down on the costly practice, causing pilots to impose a labor slowdown and forcing El Al to cancel nine flights and lease aircraft and crews from abroad to fill the holes in its schedule.

The dispute with the pilots has aroused anxieties among the rest of El Al’s workforce amid concerns the carrier plans layoffs. 

But in an interview with TheMarker on Monday, CEO David Maimon dismissed those concerns, saying El Al was in the process of hiring 40 new employees and expects to hire 60 more shortly. He accused the pilots’ workers committee of spreading groundless fears. 

“I could solve the conflict in five minutes if the pilots would stop with split flights,” he said, adding that he would stop leasing jets from other airlines if they agreed to abandon the practice.