El Al Israel Airlines Ltd. (TASE: ELAL) lost $147 million in the third quarter of 2020. The third quarter results were dramatically affected by the coronavirus pandemic; with the second wave of the virus, the airline completely shut down its scheduled passenger services and its cargo services, and most of its employees were put on unpaid leave.
At the end of the third quarter, El Al had a deficit on shareholders' equity of $125 million. During the quarter, it raised NIS 505 million in an equity offering, in accordance with the government aid plan, but it has still not reached agreement with financing body on the $250 million loan with a 75% state guarantee that is part of that plan, and is examining the possibility of a debt offering instead.
Revenue from flight operations fell to $1.14 billion, 69.2% less than in the corresponding quarter of 2019. Revenue from passenger flights fell by $1.22 billion, or 80.8%. Revenue from cargo flights grew by $90.8 million, or 90.3%, despite the fact that RTK (revenue tonne kilometers) fell by 20%.
In September, El Al completed a NIS 505 million ($147 million) equity offering in which Kanfei Nesharim, controlled by Eli Rozenberg, became the controlling shareholder in the airline, with a 43% stake.
Since there is still uncertainty about the state-guaranteed loan, which is vital for the airline to be able to deal with the consequences of the coronavirus pandemic, there is doubt about El Al's ability to continue on business, and its financial statements duly carry a going concern qualification.
Published by Globes, Israel business news - en.globes.co.il - on November 25, 2020
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