Israel’s government has agreed to provide additional financial aid to El Al Airlines to help mitigate losses caused by travel bans on foreign tourists as a result of COVID-19.
Israel’s Finance Ministry announced it would provide additional “tens of millions of dollars” for El Al over the “next few months” in a bid to support the flag carrier as it navigates travel restrictions and the current surge in Omicron infections.
“The new outline will allow [El Al] to overcome the pandemic while maintaining the principle that state aid will be provided along with external capital to strengthen their capital structure,” Finance Minister Avigdor Lieberman said.
Israel implemented strict entry restrictions to prevent the spread of COVID-19 in March 2020. In early November 2021, the country reopened its borders to vaccinated foreign passengers, but the rapid spread of the Omicron variant led Israel’s government to tighten travel restrictions once again, banning non-Israeli citizens from entering the country. The government also expanded the mandatory quarantine period for vaccinated Israelis arriving from foreign countries and tightened testing and isolation rules.
In response El Al Airlines applied for more financial aid, arguing that the entry ban would further increase losses. According to El Al’s financial report for Q3 2021, the carrier recorded a net loss of $136 million, taking the total loss in the first nine months of 2021 to $303 million.
The company has also laid off almost one-third of its employees and, since the beginning of 2021, has reduced its aircraft fleet from 45 jets to 29.