El Al plans 1,500 layoffs, disposal of 26 aircraft
The management of El Al Israel Airlines (LY, Tel Aviv Ben Gurion) has held “turbulent” meetings with representatives of the carrier’s workers’ committees and with representatives of the Histadrut, Israel’s powerful national trade union. Presenting its opening requirements for the company’s post-Covid recovery, its plans include significant cuts including the disposal of up to 26 aircraft, the closure of its Sun d’Or International Airlines (2U, Tel Aviv Ben Gurion) leisure and charter unit, and the layoffs of 1,500 employees, local media reported.
El Al currently operates a fleet of 45 aircraft, and the management told its employees that it would like to see the size of the fleet shrink to 29 or less. As part of this streamlining, it would place greater importance on the North American market and halt flights on some routes to Europe, meaning that most of the aircraft to go would likely be B737 narrowbodies.
According to the ch-aviation fleets advanced module, El Al currently operates sixteen B737-800s (six owned, ten leased) and eight B737-900(ER)s (all of them owned). The rest of the fleet consists of six B777-200(ER)s, three B787-8s, and twelve B787-9s.
After the 1,500 layoffs, El Al would be left with a workforce of 2,800 employees. Around 2,000 people have already left the company over the last year, and another 1,400 staff are on unpaid leave at least until October 31.
Participants described the negotiations on the terms of the dismissals to local media as “stormy” and “turbulent”, especially when the proposed layoffs were first presented. Employees have insisted that any such unilateral action taken by the management would bring walkouts and disruptions.
“The ink is not yet dry on the agreement to part with 2,000 El Al employees. We have ended up with the firing of tenured employees at El Al, and we are asking the Israeli government to get off the fence and introduce flexible paid leave for the aviation sector. We believe that the sector will stabilise soon and most of El Al’s employees will become more necessary for the company,” Avi Edri, chairman of Israel Transport Union which is affiliated to the Histadrut, told the financial daily Globes.
El Al is expected to respond positively to the government’s offer of a further USD50 million in aid to the struggling flag carrier, which is contingent on driving greater efficiencies and selling a substantial part of the fleet. Under that deal, the company could either repay the money or allow the government to raise its stake from 15% now to 24%, by converting the loan to shares.
As for the fate of Sun d’Or, El Al CEO Avigal Soreq conciliated that the closure of the brand, which the flag carrier created in 1977, may not in fact happen as the company intends to deepen its activities in the area of vacation packages. What is required, he added, is to reduce the administrative costs that run Sun d’Or separately. The brand has focused on holiday destinations using about four of El Al’s aircraft.