LONDON – According to reports from Reuters, El Al Israel Airlines has signed a Memorandum of Understanding to buy its competitor, Arkia.

The deal states that Arkia would become a subsidiary of the Israeli national carrier, with shareholders of Arkia getting anywhere between 10-14% stakes in El Al.

Commenting on this news was El Al’s Chairman Amikam Ben Zvi, who went into some details about this:

“We still have a long way to go before the deal to acquire Arkia is completed, which is part of El Al’s strategy to expand into additional areas of activity”.

This looks to be the end product of talks between the two sides since October last year.

Such an acquisition has prompted questions, especially with El Al’s financial position not being at its best currently.

El Al has had to slash its workforce by a third, reduce routes and its fleet from 45 aircraft, to just 29.