Israel’s Finance and Transportation Ministries have issued a joint statement announcing that the country’s cabinet has approved a further round of borrowing for carriers that have been affected by the ongoing COVID-19 pandemic. A total of US$44 million will be made available in the form of interest-free, three-year bonds. According to REUTERS news agency, any of the country’s publicly traded carriers will be given the option to convert a bond into shares allotted to the state at maturity, though the state will hold a maximum 24% of any airline’s equity and would have no voting rights.
Israel’s Transportation Minister Merav Michaeli said the proposal provides a balance of the government’s responsibilities with those of the controlling shareholders of airlines. It “benefits the Israeli public first and ensures the stability of the companies and their employees,” she said.
Flag carrying El Al Israel Airlines, Arkia and Israir have been hardest hit during the pandemic with the country’s borders predominantly closed to foreign tourists as of March 2020, though from this November, fully vaccinated tourists are now able to visit the country providing it is within six months of their last vaccination. Since the start of November, tourists who have been vaccinated against Covid can enter the country within six months of their last dose. El Al, which has been negotiating to buy Israir, requested US$100 million from the government in September as compensation for its strict travel policies. The airline has reported losses for three years and incurred additional debt for fleet renewal. It has laid off 1,900 employees, approximately a third of its staff, as part of a recovery plan mandated by the government to receive a US$210 million aid package earlier in the year and reduced its fleet from 45 aircraft to 29. (£1.00 = US$1.34 at time of publication).Email Post to a Friend