Israel’s El Al may buy smaller rival Arkia Airways, it announced in a statement to the Tel Aviv Stock Exchange on October 18, 2021.
El Al is discussing with Arkia “a possible transaction” which would involve Israel’s largest airline buying Arkia in exchange for issuing El Al shares to Arkia shareholders.
There is no agreement and negotiations are only in an initial phase, El Al clarified in the stock exchange statement.
El Al started in 1948 as the national airline of the new state of Israel. Currently, it has a fleet of 45 all-Boeing aircraft, including the 787-8 and 787-9 Dreamliner, the 777, and the 737-800 and 737-900ER, according to its website.
The airline has been hit hard by the COVID-19 pandemic and received a government bailout to keep it afloat. In the second quarter of 2021, El Al was running at 31% of its pre-pandemic activity. It managed to reduce its net loss to $81 million from a loss of $86 million in the first quarter of the year as travel restrictions were eased. However, the emergence of the Delta variant of the virus forced it to adjust its flying again. The airline requested further financial assistance from the government in September 2021.
Arkia Airways focuses on the leisure market, offering flights to tourist destinations from Tel Aviv. It has five aircraft in its fleet ‒ two Airbus A321s and three Embraer E195s