Israeli airline El Al is planning to place 80% of its 6,300 employees on unpaid leave as revenues drop amid the coronavirus outbreak, Israeli media reported. Some 600 of the airline’s 650 pilots are among the 4,000 employees placed on leave by the company, according to Channel 12 News.
In a filing to the Tel Aviv Stock Exchange on Wednesday, Israeli airline El Al said the extension of self-quarantine requirements to all individuals arriving in Israel were expected to have “fundamentally adverse effect” on the company’s operations.
Prior to the announcement made by Prime Minister Benjamin Netanyahu on Monday night, El Al said it expected revenues between January and April to drop by $140 million-$160m. The airline said it is now unable to estimate the extent of the damage.
El Al said it would continue to make “operational and commercial adjustments” to its operations based on demand, adding that it is likely to cancel “many flights.” Prior to the implementation of Israel’s updated quarantine policy, El Al announced its intention to lay off 1,000 permanent and temporary staff – almost a sixth of its workforce – as it rolled out a series of cost-cutting measures implemented to “ensure the future” of the company.
The Israeli flagship carrier has also postponed the opening of new routes to Chicago until June 28, to Dusseldorf until July 3 and to Tokyo until August 29. Histadrut labor federation chairman Arnon Bar-David said an agreement between El Al employees and management “was very close” after late night negotiations, which are due to recommence on Wednesday evening.
“Company employees are paying from their pockets but out of a belief that El Al is their home,” said Bar-David. “I urge the Ministry of Finance to quickly present a rescue package for the company, in recognition of the fact that El Al is a strategic asset to the Israeli economy.”
Facing decreasing demand, Delta Airlines announced late on Tuesday that it is suspending all operations between New York JFK International Airport and Ben-Gurion Airport from March 14 to March 24. The Atlanta-headquartered carrier has also suspended its service to Rome until April 30, after previously suspending services to other destinations in Italy.
United Airlines said it would continue to fly to and from Israel as usual, operating 14 weekly flights to Newark Liberty International Airport, three weekly flights to Washington Dulles International Airport, and six weekly flights to San Francisco International Airport.
Israeli airlines Arkia and Israir said they were halting all international operations as a result of the announcement. Both airlines plan to continue their domestic operations, shuttling passengers between Ben-Gurion Airport and Eilat’s Ramon Airport.
Other airlines cancelling all their services to Israel include popular low-cost airline Wizz Air, Virgin Atlantic, German airline Lufthansa and subsidiaries Swiss Air Lines, Austrian Airlines and Brussels Airlines.
Turkish Airlines will reduce its service from about 50 weekly flights to just 14, while Italian airline Alitalia will now operate only one flight per day between Rome and Tel Aviv.
Anticipating severely reduced demand, the Israel Airports Authority (IAA) said it placed all temporary employees on unpaid leave, and some employees will be offered early retirement. Hundreds of security staff will also be placed on unpaid leave, beyond the 150 employees who have already been laid off.
Forecasts released by the IAA showed that they expect total daily footfall to decline to fewer than 22,000 passengers later this week compared to figures exceeding 46,000 earlier this month. All international flights from Ben-Gurion Airport will now depart from Terminal 3, where only two concourses (C and D) will remain open.