Israel Throws $100M Lifesaver to Airlines Drowning in COVID Debt

Israel’s cabinet approved a $100 million aid package for the country’s three major airlines, which have been hard hit by the coronavirus crisis, Israel’s Finance and Transportation ministries said in a joint statement on Sunday. “The spread of omicron in the world and in Israel has caused a significant drop in the activities of Israeli airlines,” the statement said. “The finance and transportation ministries have worked intensively to formulate an additional blueprint to enable those companies to weather the crisis.” The Israeli government will offer El Al, Israir and Arkia airlines $85 million in three-year interest-free convertible bonds. In addition, it will provide advance funding for the anticipated costs of excess fuel and maintenance over the next 20 years due to the air defense systems that are installed on Israeli aircraft, to the tune of $15 million for all three airlines. The bailout won’t fall only on the government’s shoulders; the airlines’ controlling shareholders are expected to inject $2 into the companies for every $3 that the state grants. Last year, El Al received $210 million for security staff tickets and other expenses in a package that required the airline to lay off 1,900 employees – nearly one-third of its staff – and reduce its fleet from 45 to 29 aircraft. Israir received $16 million in a similar arrangement.