Some good fuel hedging agreements may result in a small profit for El Al at the end of this year, but this will not change the Israeli airline’s core problem – about 1,000 redundant employees.
The 6,000+ employees of El Al are the heavy weight that is worsening the airline’s situation to a point where it will have to act, but will not be able to do so because it is bound in iron chains, namely strong workers’ unions and archaic contracts.
Redundant employees. Bonuses that some of the top management got last year (some of the money was returned and put in funds for the employees after the decision outraged the staff). All this, and a lack of trust between the president and the pilots, have pushed El Al into a corner.
The solution is not simple but steps can be made to start the long path to recovery. The experts cannot understand why El Al does not initiate a deal to merge with one of the two other Israeli airlines, Arkia and Israir.
This seems the most logical thing to do. If it happens, it will actually create two types of operations – the El Al widebodies (777, 747-400) will operate the long hauls to the USA and Asia, while the combined narrowbody aircraft of the two airlines that merge will operate the short and medium routes (737, A320 and E-195).
Such an operation may improve the situation of the two airlines as it will be a more logical arrangement than the one that exists today.
But when emotions and ego are ruling, common sense is pushed aside, and this results in a situation that casts a doubt on El Al’s capability to keep operating.
In the past, the Israeli anti-trust commissioner has expressed fierce opposition to any proposed merger between two of the Israeli airlines. This has changed.
The fact that three Israeli airlines operate in such a small market, which is served by some 50 scheduled and charter airlines, has created some absurd situations.
The “winner” on that front is El Al’s decision to operate domestic flights from Ben Gurion international airport to Eilat, the resort on the Red Sea.
This can be compared with a decision by a major airline to operate agricultural spraying flights. The expertise in marketing these flights is not there and the equipment does not fit.
So, many redundant employees, wrong decisions, and above all, ego, are hampering any real recovery.