https://hamodia.com/2022/02/21/el-al-share-price-bottoms-out/YERUSHALAYIM -
The tale of El Al Airlines during these pandemic years has been full of woe—a grounded passenger fleet, threats of financial collapse, state bailouts painfully negotiated, unwanted buyouts, massive layoffs, losses of almost $1 billion in the last four years.
But on Monday the news was actually good: over the past two months, the share price of El Al Airlines has climbed 70% from its lowest level in over 10 years, to 3.5 shekels (the level it was at in late October last year), according to Globes.
The recovery of the share price has been helped along additional aid from the state, and from further investment by controlling shareholder Kenny Rozenberg, plus reports of a prospective merger with Arkia.
The lifting of pandemic restrictions on air travel makes it possible to think once again of a return to normalcy, maybe even the profitability of the country’s flagship carrier. The company can report a substantial rise in bookings for flights to and from Israel; and plans are afoot to restore routes that were halted during the pandemic, such as direct flights from Tel Aviv to Boston.
Recovery is still a process, though, not an accomplished fact.
El Al has undertaken to the Ministry of Finance to raise 100-150 million within a short period. It has put up for sale a stake in its frequent flyers club, while retaining control of it.
Talks on a sale of 30% of the club to Bank Hapoalim at a valuation of some $250 million are not close to a conclusion. El Al is examining another possibility for raising loan finance, through the mortgaging of slots (take-off and landing times) that it has at main airports.
El Al’s deal with Arkia is still in the MoU stage; signing of a binding agreement will depend on the signing of a collective agreement with the Histadrut covering the employees of both airlines. Tut Holdings has not yet officially given its consent to the merger plan, which will lead to Arkia’s employees losing their influence on the way the airline is managed. Only if it clears those hurdles will it be able to apply to the Competition Authority for approval of the merger.
In the meantime, the news for a change is good.
