El Al crisis: Union representatives and many MKs have publicly opposed the Ministry of Finance's strict conditions placed on the provision of government-backed loans: they will not be awarded until companies undergo extensive internal restructuring. Their criticism is that delaying these loans could result in thousands of layoffs. MK Nir Barkat stated that the Israeli public has "very little confidence in our financial leadership," while Histadrut chairman has warned that the result of this policy will be a "bloodbath of layoffs." The heated debate was held last week in front of the Knesset’s finance committee.
"The mandate given to us by the Prime Minister was to make sure that Israel still has in airline industry after this crisis and not to save a particular company," said the Director General of the Ministry of Finance, Shai Babad.
"We have met with representatives from El Al, Arkia and Israir. The negotiations are being held with El Al because they are in the worst situation, but we are not considering assistance to a single specific company. If we decide to assist, it will be offered to all airline companies" said Babad. "The reason that we are demanding reorganizing measures is to ensure that the company will be able to repay the loan, and make sure that the loan will suffice for the duration of the crisis."
"6,500 workers employed directly and thousands more indirectly"
"Even the Prime Minister understands that we must make sure that there are as few disruptions to the flights as possible. This is not the fault of the airline companies" said Arnon Bar-David, chairman of the Histadrut. "Israeli airline companies are dealing with an unprecedented crisis. We intend to stand by them" he said.
"There are over 6,500 workers employed directly by El Al, and thousands more employed indirectly" reminded Bar-David those present. "The cutbacks that the Ministry of Finance has demanded in return for government assistance would bring on a bloodbath of layoffs. We're facing an unprecedented unemployment crisis. I call on the government to bail out airline companies. Even if this means that the government nationalize parts of the company, and sell them off again later. We need to think out of the box. Most national airlines have received aid from their governments," he said, and promised to continue pressing the government to approve a loan.
The Ministry of Finance is preoccupied with saving money. That might be the right approach for a business, not for the government
"This future of Israeli airline companies is completely dependent on this government aid" said Meidan Bar, chair of the pilots union. "The airline industry entered into this crisis in a very weak position. In such a cutthroat market, without assistance Easyjet will enter the market after the crisis, and then we're finished" he said.
Nir Barket, a Likud MK is also critical about the government's delay. "I think that the Israeli public has a high level of trust in the healthcare system, but very little confidence in our financial leadership" he said. "The Ministry of Finance is preoccupied with saving money. That might be the right approach for a business, not for the government. In times like this we need direct aid for businesses, in massive amounts" he said.
Barkat criticized the Ministry of Finance's approach to El Al. "How dare you try to manage El Al?" he said. "You have no experience in anything of the sort. Instead of trying to push the company to reorganizations and layoffs we must bail them out, now".
Babad reacted to Barkat's accusations, claiming that El Al should focus on maximizing profits and not employing workers. "Our strategy for aiding the airline industry is trying to go back to flying as soon as possible" he said.