El Al begins 1,000 layoffs

Gonen Usishkin  / Photo: Sivan Faraj

A meeting between El Al's worker's committee, the Histadrut, and El Al management broke up after five minutes.

At the end of a meeting today between El Al Israel Airlines Ltd. (TASE: ELAL) management and the workers' committee, the El Al workers were informed that 1,000 of them were being laid off. In addition to layoffs of temporary and permanent staff, salaries of El Al's board of directors and management are being cut by 20%, accompanied by a demand for a similar cut among the airline's high-paid workers included in the collective labor agreement. Hiring at El Al has been discontinued until further notice.

MK Nir Barkat (Likud) was present at the El Al meeting, which broke up after five minutes.

"Coronavirus poses a challenge that is becoming more acute by the day. The pace and force of events require thinking, coordination, and organization among the countries of the world, and will greatly affect the global economy. The virus is spreading and expanding to more countries, and no end to the crisis is in sight, nor is it possible to foresee the direct and indirect consequences for the civil aviation and tourist sectors, including El Al," El Al CEO Gonen Usishkin wrote to El Al's workers.

Usishkin referred to Israel's decisions, "which have not been taken by any other country in the world," and which "are have an immediate effect on our flight schedule and ability to carry out our commercial plans… The decision to quarantine passengers returning from Thailand, Japan, Hong Kong, China, South Korea, Macau, and recently also Italy, and the publication of an order by the Ministry of the Interior barring the entry into Israel of foreigners who had been in these countries, combined with the call by the Ministry of Health to Israelis to consider overseas travel in general, have resulted in cancellation of flights on an unprecedented scale and a dramatic decline in flight bookings."

Usishkin mentioned the temporary halt in routes to China, Hong Kong, Thailand, and Italy; the delay in launching the route to Japan; and the amalgamation of the flights in which the number of passengers dropped sharply.

The streamlining measures demanded from the workers include an across-the-bard cut in expenses, while "The investment and projects budget was immediately slashed." Contracts with suppliers will be revised.

El Al is waiting for fulfillment of the promise by the prime minister, minister of transport, minister of tourism, and "other economic leaders, such as the Histadrut chairman and the president of the Manufacturers Association of Israel, who declared that in view of the urgent situation, aid should be given to El Al, and consideration of ways of helping El Al had begun. At this stage, nothing has been agreed."

Usishkin termed the current crisis "one of the most complicated and difficult. Together, we will do everything and act in every way, regardless of how difficult and painful, to ensure the company's future.

"The measures on which we have decided are being implemented out of a mixture of pain, responsibility, and personal example. We feel for the loss of people to whom we will have to say goodbye. We bear responsibility for the remaining people at El Al, who will be partners in the intensive effort to meet the challenge. A personal example is being given by the managers, whose salary is being cut substantially. This measure is part of those being taken in order to enable to the company to survive the crisis and emerge strengthened from it."

The El Al workers' committee said in response to Usishkin's announcement of layoffs and wage cuts, "We were astonished to receive the CEO's letter now, at a time when we are meeting with representatives of the Histadrut and the government in order to find a way to save the company. It is important for us to make it clear to the workers that their representatives and the Histadrut have not agreed to any layoffs, and we call on the company's management to refrain from unilateral decisions.

"We call on the workers not to pay any attention to the CEO's letter, and to wait for news and instructions from their representatives. We promise - El Al is the home of all of us, and we will everything to save it."

Shortly after the meeting the Ministry of Health announced that France, Germany, Spain, Switzerland and Austria were being added to the virus blacklist.

Published by Globes, Israel business news - en.globes.co.il - on March 4, 2020

© Copyright of Globes Publisher Itonut (1983) Ltd. 2020

Gonen Usishkin  / Photo: Sivan Faraj
Gonen Usishkin / Photo: Sivan Faraj
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