LONDON – Israel’s airlines El Al, Arkia, and Israir is set to receive an $85 million aid package as part of a COVID-19 relief bill.
The Israeli Ministry of Finance, which has published details about the aid, will invest the money in interest-free convertible bonds for each of the airlines, for a period of three years.
The biggest airline in terms of fleet and passengers, El Al, will receive the major share of the relief bill, with Arkia and Israir getting similar amounts, even though Israir has a larger fleet and carries more passengers.
According to the agreement, the state’s stake in any of the three airlines won’t go above 24 percent. The government currently holds 13.3 percent control of El Al, although it makes no decisions about management or policy.
The financial aid to be given has been increased by $41 million from the $44 million approved last November, of which $30 million was earmarked for El Al and $7 million each for Israir and Arkia.
At the time, El Al agreed to the state aid package, which required controlled shareholder Kenny Rozenberg to inject the same amount into the airline but there was no commitment from the controlling shareholders of Arkia and Israir to do the same.
The ratio of the commitment has now been altered, with the controlling shareholders required to inject $2 for every $3 that the state grants.
The state is also offering to pay the three airlines an overall sum of $15 million for surplus fuel, maintenance, and security systems expenses for the next 20 years.
Since the start of the pandemic, the Israeli government has injected into El Al around $210 million for security staff tickets and other expenses, while Israir received $16 million.