TEL AVIV, Sept 16 (Reuters) – Cash-strapped El Al Israel Airlines raised $148 million in a government-mandated share offering on Wednesday that will enable it to receive a state bailout package.
In a regulatory filing in Tel Aviv, Israel’s flag carrier said it sold 753.35 million new shares at 0.671 shekels ($0.1963) each.
Its stock earlier had closed 5.6% higher at 0.774 shekel.
Demand reached 654 million shekels while El Al accepted 505 million shekels ($148 million) worth.
El Al did not give further details of the offering which took the total number of shares outstanding to above 1.2 million.
But Israeli media reported that Eli Rozenberg had obtained a controlling stake via the offering, with 44.9% of the airline’s shares. He is the son of American businessman Kenny Rozenberg, CEO of New York-based nursing home chain Centers Health Care.
Rozenberg in July had offered to funnel $75 million into the airline in return for a 44.99% stake.
An El Al spokesman said he could not immediately confirm the reports about Rozenberg’s bid.
Newspapers said the state’s overall stake would now be as much as 15.5%, while the current controlling shareholder – Knafaim Holdings – would see its stake fall to about 15%.
Israel’s Finance Ministry said it paid $34 million for its shares and that although it pledged a $150 million safety net, it was barely needed.
“The results of the offering express investors’ trust in the company’s business plan and in state aid,” it said in a statement.
El Al has been hit hard by the coronavirus outbreak and the government has for months offered to intervene to help it avoid bankruptcy.
That has included mandating a share offering and steep spending reductions to receive a $250 million loan that will be 75% backed by the government and used partly to pay back customers whose flights were cancelled.
The airline has reported losses for two years running, racked up debt to renew its fleet, and suspended flights when Israel closed its borders and furloughed most of its employees.
($1 = 3.4185 shekels) (Reporting by Rami Ayyub and Steven Scheer; Editing by Andrew Cawthorne)
El Al Israel Airlines is outsourcing operation of its main freighter route between Tel Aviv and Liege, Belgium, to Atlas Air Inc. under an extended charter arrangement.
Atlas, an aviation services company headquartered in Purchase, N.Y., said Tuesday it is leasing El Al a Boeing 747-400 all-cargo aircraft, operating it with its own crew and providing maintenance and insurance (ACMI) beginning this month.
El Al, a new customer for Atlas, is experiencing strong growth in demand across its freight network, according to the announcement. The Israeli carrier sells the space on the plane and covers expenses such as ground handling, landing fees and fuel.
No terms of the commercial cooperation were disclosed, but ACMI deals typically run for one to three years.
With the inaugural EL AL flight between Tel Aviv and San Francisco, EL AL and Alaska Airlines signed an expanded global partnership allowing their members to more easily connect and earn miles.
TEL AVIV, Israel and SEATTLE, May 13, 2019 /PRNewswire/ — EL AL Israel Airlines and Alaska Airlines today expanded their commercial relationship to include a reciprocal frequent flyer agreement. The agreement was signed by the CEOs of each airline at a ceremony soon after the arrival of the first EL AL flight from Tel Aviv to San Francisco and was attended by San Francisco Bay Area dignitaries and civic leaders. This agreement is in addition to the codeshare agreement that recently came into effect between the airlines allowing EL AL to place its “LY” code on various Alaska Airlines “AS” flights in the U.S.
The codeshare agreement which has been available for sale as of April 28th for flights as of May 5th includes flights from Newark, Los Angeles and now San Francisco onto a host of Alaska Airlines flights. From San Francisco, EL AL will place its code on flights to Seattle; San Diego; Portland, Oregon; Honolulu; Los Angeles; Palm Springs, California; Albuquerque, New Mexico; Austin, Texas; Dallas (DAL); Santa Ana, California, Everett, Washington, Kansas City, Missouri; Salt Lake City; Kona, Hawaii and Las Vegas. Upon regulatory approval, will also include flights to various points in Mexico.
With the EL AL and Alaska Airlines partnership, customers will be able to continue their journey to and from North America and Israel with connections on both airlines, in either direction. Both airlines will offer the opportunity for their members to earn miles while flying with the partner airline. Base miles flown on EL AL will also count toward elite status in Alaska’s Mileage Plan program. Additionally, EL AL travelers will be able to redeem their EL AL Matmid miles to book on Alaska flights in the future.
“This is truly a historic day for EL AL,” said EL AL CEO Gonen Usishkin. “Aside from the fact that EL AL is linking the two high-tech centers with the new three times weekly flights, we are providing the full options for our customers with the codeshare and frequent flyer agreements with Alaska Airlines,” he emphasized. “Alaska Airlines was instrumental in helping bring Jews to Israel in the early years of the state, helping to build our country and now as we celebrate 70 years of those historic flights, continue to be a key player along with EL AL in building the bridges between America and Israel.”
“Alaska Airlines and EL AL will now offer more opportunities than ever before for travelers to fly nonstop between the West Coast and Tel Aviv. Through our partnership, both EL AL and Alaska Airlines offer frequent flyer benefits to our guests while sharing the genuine, caring service that is at the heart of both of our airlines,” said Brad Tilden, CEO of Alaska Airlines. Alaska Airlines offers an option to go global differently with hand-picked partners, and Mileage Plan miles can be used at home with Alaska or with Alaska Global Partners. With the EL AL partnership, Alaska Airlines’ international connectivity out of SFO is stronger than ever; by June 2019, Alaska’s Global Partners will offer more than 80 flights per week out of San Francisco.
The EL AL flights will operate three times weekly flying a state-of-the-art 787 Dreamliner, offering Business, Premium and Economy service. The flights from Tel Aviv will depart on Monday, Wednesday and Friday at 0105 and arrive in San Francisco on the same day at 0600 for a flight time just under 15 hours. The flights from San Francisco to Tel Aviv will operate on Monday and Wednesday departing at 2000 for arrival the next day at 1940 and on Saturday night with a 2245 departure arriving in Tel Aviv at 2225 the next day for a flying time of just over 13 and a half hours.
About EL AL Israel Airlines
EL AL Israel Airlines, Israel’s national airline, established in 1948, offers more nonstop flights than any other airline to/from Israel. EL AL currently flies to 36 destinations from Israel, serves hundreds of other destinations throughout the world via codeshare, and interline partnerships. EL AL offers a full Boeing fleet and began renewing its fleet as of September 2017 with the arrival of the first of its sixteen 787 Dreamliner aircraft. Soon to be new routes will include Las Vegas, Chicago and Orlando (summer seasonal flights only) in the USA. In 2017 EL AL flew over 5.6 million passengers. EL AL embodies Israel’s values of innovation and caring and is known for its genuine Israeli hospitality. Learn more about EL AL at: www.elal.com.
About Alaska Airlines
Alaska Airlines and its regional partners fly 44 million guests a year to more than 115 destinations with an average of 1,200 daily flights across the United States and to Mexico, Canada and Costa Rica. With Alaska and Alaska Global Partners, guests can earn and redeem miles on flights to more than 900 destinations worldwide. Alaska Airlines ranked “Highest in Customer Satisfaction Among Traditional Carriers in North America” in the J.D. Power North America Airline Satisfaction Study for 11 consecutive years from 2008 to 2018. Learn about Alaska’s award-winning service at newsroom.alaskaair.com and blog.alaskaair.com. Alaska Airlines and Horizon Air are subsidiaries of Alaska Air Group (ALK).
Israeli antitrust investigators raid El Al offices. Israel’s El Al Airlines has stated that Antitrust Authority investigators raided the offices of its charter airline subsidiary called Sun D’Or on February 16th, 2016. Investigators seized documents and questioned several of its senior managers. It is believed that the investigation is related to possible price fixing for certain charter flights. El Al Airline was incorporated as Israel’s national flag carrier on November 15, 1948.
