El Al May Cut Out Cairo Route

El Al is losing $20 million a year on its regular flights to Cairo, and is considering cancelling the route as part of its restructuring plan, TheMarker has learned. CEO Haim Romano took off over the weekend to examine up close a number of the airline's destinations that it is considering cancelling - or cutting back on due to El Al's difficult financial situation.

Among the destinations also being studied for cutbacks is Cyprus. But cancelling the Cairo route would be a significant political problem. On the other hand, El Al's flights to the Egyptian capital return empty, in fact the airline does not even bother to prepare meals for passengers for the flights in advance. At the same time the security costs for these flights are particularly high.

Since Israel is interested in continuing the Cairo flights in light of the special relations between the two countries, one possibility is that El Al will transfer the route to another Israeli company: Israir or Arkia. They could fly much smaller planes on the route, and possibly lose much less money. In the past Arkia took over the route to Jordan after El Al stopped its flights.