Taking stock of the industry; Scope issues aviation ratings methodology
16th May 2018
El Al airlines said Monday that the Treasury has rejected the carrier’s request for a state loan of $350 million to weather the coronavirus pandemic.
In a statement to the Tel Aviv Stock Exchange, the company said: “Representatives from the Finance Ministry informed the company that for now the Treasury’s team of professionals is not approving the requested aid package.”
“The team said that it was under the authority of the political echelon to make a different decision, and in response, the company turned to the Israeli government for assistance,” the statement said. “State support in the near term is essential to allow the company to cope with the consequences of the coronavirus crisis.”
According to local media, Israel Finance Ministry officials said they did not believe El Al would be able to repay the requested loans.
Officials believe the airline’s assumptions about its return to routine and future revenue were unrealistic. The Finance Ministry expects the aviation industry as a whole will have a much later recovery than El Al’s forecast.
Late last month El Al suspended all commercial flights. The company said it would continue to operate flights to repatriate Israeli citizens stranded overseas in coordination with the Foreign Ministry and the Defense Ministry, as well as cargo flights.