El Al - the Israeli government may act

The Israeli government may take action if El Al's financial state threatens its ability to continue its operations.

While El Al is a public company, it is still considered the "flag carrier". This is not only because the government has a "golden share" in the airline, but also because it has a strategic value in any state of emergency Israel may encounter.

Most foreign airlines quit flying to Ben Gurion airport when the first missiles hit central Israel in 1991. The Scud missiles that were launched from Iraq left El Al almost alone in the market.

So, it is only natural that the airline's current situation of losses, and unrest in management-employee relations, worries the relevant ministries.

As I wrote here previously, El Al sees the upcoming Common Aviation Area agreement between Israel and Europe in apocalyptic terms. The Israeli airline in recent years has become a "serial complainer".

First it was the fact that it is not accepted in any of the aviation alliances, and now it is the agreement with Europe.

Instead of trying to change the bad situation of flying only five-and-a-half days a week, El Al chose to try and survive in this harsh environment.

This historic restriction was born many years ago, when El Al was still state owned. The weight of the religious parties in the government coalition created that strange situation in which El Al does not fly on the Jewish Shabbat.

The problem is that after El Al was privatised, it did not make any effort to change the situation.

The Israeli transport minister has delayed until now the signing of the common aviation agreement with Europe, but that alone did not help.

The financial situation and the deterioration of relations between the management and the employees, especially the pilots, have brought El Al to a critical juncture.

This is the background for the preparation made by the government for if the "worst comes to the worst". In that case, sources say the government may make an unprecedented move and actually "nationalise" the airline.

This of course will be a last resort, but the fact that it is being considered shows that the situation has turned on big red lights.