El Al is in the process of purchasing competitor Arkia

The two Israeli competitors are set to join forces following a memorandum of understanding. El Al confirmed this week that it entered a non-binding memorandum of understanding (MoU) to purchase compatriot Arkia.

The move would see Arkia become a wholly-owned subsidiary of the flag carrier of Israel, with Arkia’s shareholders obtaining a 10%-14% stake in El Al via shares and options.

In October 2021, we reported that El Al was in the process of taking on Arkia. As part of the move El Al would benefit from the acquisition of a pair of three-year old A321LR narrowbodies, a type Arkia was the first to take delivery of. The airline would also inherit three ERJ-195 in the fleet.

Notably, Arkia has two A330-900neos on order, with options for an additional couple. So, El Al would have some fresh Arkia Airbus and Embraer additions to the company’s exclusively Boeing fleet.

Lucrative airport slots are also up for grabs amid the transaction. Amsterdam, Barcelona, Batumi, Budapest, Dubai, Larnaca, Prague, and Rome have all been key destinations for Arkia, allowing for El Al to bolster the group’s frequencies across Europe and the Middle East via its new subsidiary.