This week, Israel's famous airline El Al declared a state of emergency, threatening to send 5,040 of its workers, which make up 80 percent of its workforce, on unpaid leave, and fire another thousand. These drastic measures are being entertained amid a constantly unfolding national economic crisis surrounding the spread of COVID-19 in Israel, which has hit the airline and tourism industries the hardest.

Acceptance constitutes acceptance of the Website Terms of Use

El Al workers protesting (Photograph: Histadrut press office)

El Al, once a symbol of national pride, is seeking an emergency $700 million loan in a desperate attempt to stay solvent amid the crisis, and has insisted on a set of draconian measures including cutting its workforce by 80 percent. The El Al workers' union has accused the company's management of refusing to negotiate the steps taken to keep the company afloat, and has declared it will resist any unilateral steps.

El Al has been posting larger and larger losses over the past month, with current estimates as high as 160 million shekels between January and April alone. Low demand due to fear of the virus, coupled with stricter and stricter restrictions on tourists entering Israel have caused El Al to cancel close to 2,000 flights, with the company effectively shutting down operations as of Thursday.

Gonen Usishkin, El Al CEO (Photograph: Flash90)


The Histadrut, the umbrella union of which the El Al workers' union is a member, has called for the government to intervene and rescue the company with an immediate solvency package. While the Minister of Finance Moshe Kahlon has promised to take drastic measures to aid the distressed airline and tourism industries, the government has yet to announce any official action.

The airline is the first Israeli company to react to the crisis with a largescale reduction of its workforce, and the Histadrut has warned that unless the government intervenes, Israel could face a massive wave of layoffs in the coming weeks.

Originally a state-owned company, El Al was founded in 1949, and has played an important role in Israeli history. As a state-owned company, El Al's fleet played a crucial role in many of the Aliyah operations from Arab countries during the 1950s, and was the first Israeli airline to offer fights to Egypt and Jordan after peace agreements were signed with each nation. El Al was often regarded as 'Israel's face to the world', and has become a worldwide symbol of Israel.

New olim disembarking a plane (Photograph: Yossi Zamir / Flash90)

As part of the extensive privatization of public assets in the 90's and early 2000's, El Al's stock went public in June 2003. The company's stocks were sold at a low price, causing government shares to fall below 50 percent, and effectively ending El Al's status as a state-owned company. Today the majority of shares are owned by 'Knafayim Holdings Ltd.'