Israel Airport Staff Win Big as Government Races to Pass 2019 State Budget

IAA management signed an agreement with Israel's finance minister to give every employee a $5,000 one-time bonus

Airport employees stand in front of biometric passport machines at Ben-Gurion International Airport, September 28, 2017.
\ Eyal Toueg

For Pinchas Idan, head of the Israel Airports Authority workers committee, there couldnt be a better time to squeeze money from the treasury: Finance Minister Moshe Kahlon wants to pass the 2019 state budget as soon as possible, and part of the revenue he needs was due to come from the IAAs accumulated surpluses.

That is the background to an agreement the IAA management signed with labor this week, giving every permanent employee of the IAA — the ones the union looks out for — a one-time bonus averaging 20,000 shekels ($5,838).

Temporary workers will get a lot less and contractors nothing, violating a treasury policy opposed to differential bonuses between classes of employees and giving the biggest bonuses to the workers making the most money to begin with.

This is how the treasury is buying quiet from the workers committee, said one source close to the IAA. Theyre giving [Inbar} and his people a nice bonus and one that much bigger than for other workers — and in exchange they wont make trouble when the treasury demands the money.

The treasury hasnt formally requested the IAA turn over the 1.2 billion shekels, saying it hasnt been formally asked to. It said the bonus agreement was reached between the workers committee and the treasury without its involvement and that it only learned about it from media reports.

The 2019 draft budget goes to the cabinet Thursday in a bid to get the spending package approved long before the fiscal year begin and (its hoped) before the police investigations against Prime Minister Benjamin Netanyahu wind up.

A key part of the revenue mix Kahlon plans for the budget is 1.2 billion shekels of accumulated surpluses the IAA has run up as well as plans to take 50% of the IAAs net income in the future for the budget.

In normal times, winning the consent of the powerful IAA workers committee would have involved prolonged negotiations and work slowdowns before an agreement was reached.

The bonus will be paid to about 1,600 permanent IAA workers based on their average pensionable salary, Some 2,200 temporary workers will get a bonus equal to half their pensionable salaries. The Finance Ministrys wages commissioner didnt have figures on the average pay for the latter group but it is far less than what permanent staff are paid.

With the boom in foreign travel in the last five years, the IAA has been amassing huge surpluses, which come from the difference between the revenues it earns from fees paid by passengers and airlines, and rent from commercial tenants at airports versus its expenses.

In 2016 alone, fee revenues came to 1.8 billion shekels and rents an additional 1.62 billion, all told a 5.4% increase from the year before. The IAA is worried the windfall will eventually end because a surge in online buying from overseas websites like Amazon is threatening to cut into duty-free sales at Israels airports.