El Al is one of the Israeli economy's most significant corporate casualties from COVID 19 and will not survive without state assistance, says its chief executive Gonen Usishkin, as the firm announced a $60 million net loss for 2019.
“We asked the Israeli government to assist El Al as most countries in the world have done. In the last two months the Company's management team has been working around the clock to implement a series of operational and financial measures aimed to reduce the Company's expenses.
We established a streamlining program to allow the Company to operate in the coming years and return to profitability; however, these measures will not be sufficient without the Israeli government support," Usishkin added.
El Al’s chief financial officer Dganit Palti, said that despite the loss the firm generated unprecedented cash flow from operating activities totalling $294 million and completed the year with high cash balances of $264 million. But despite this she warned that El Al's passenger operations have stopped and it is in a serious cash flow crisis.
“The Company took many steps to improve its liquidity, mainly by sharply reducing its expenses and suspending investments. Concurrently therewith, we carried out financial transactions to improve the Company's liquidity, inter alia, sale and lease back of three aircraft.
We established a business plan containing profound streamlining measures that are currently in the process of implementation, and we expect the state's decision to provide a guarantee for a $400 million bank loan, that will allow the Company to return to growth and profitability, " said Palti.
But the results announcement said that if negotiations over the bank loan were unsuccessful, “the Company estimates that there are significant doubts about its continued existence as a going concern".