EL AL trying to compensate itself in the face of harsh reality

The Israeli airline EL AL is operating in “unconventional” conditions and is trying to balance these with new commercial initiatives.

The latest one is a plan to form a maintenance, repair and overhaul (MRO) operation in the fast-growing Chinese market.

Knafaim Holdings, which has the major stake in EL AL, is evaluating the establishment of an aircraft maintenance centre in China in co-operation with an unidentified Chinese partner.

Knafaim Holdings and the Chinese company have signed a letter of understanding (LOU). According to this, during the next six months the two sides will evaluate the possible options for establishing the joint company.

According to the LOU, the two sides will perform due diligence studies on each other.

EL AL has been trying for years to expand its maintenance services at its main base at Ben Gurion international airport in Tel Aviv.

The fact that the Bedek division of Israel Aerospace Industries (IAI) has a big MRO centre at the same airport means that EL Al has had limited success in its efforts.

If the effort in China is successful, it may be some small compensation for the Israeli airline for operating only five-and-a-half days a week as a result of the pressure from religious parties, and for not being able to join one of the aviation alliances.

An attempt to form a “private” aviation alliance with some eastern European airlines has not been successful yet. The MRO centre in China is another attempt and others are planned.

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