El Al is to phase out its remaining Boeing 747 Classics as part of a strategic re-organisation which will include streamlining the airline's route network.

The Israeli national airline's fleet restructuring is the major component of a reorganisation just agreed by the El Al board as it seeks to reduce losses. The airline has suffered a 40% reduction in incoming traffic due to unrest between Israel and the Palestinian authority.

David Hermesh, El Al's president, says that the disposal of its six remaining 747 Classics (two -200 passenger models, two -200Fs and two -200 convertibles) will cut the number of types operated and "allow us to reduce the workforce accordingly". The airline plans to lay off some of the cockpit and maintenance crews, and transfer the rest to other types.

Four 747-400 passenger aircraft are already operated and these will be joined by two -400 Freighters on lease. El Al will sell two of its seven 757-200s, and will acquire an additional 777-200 on lease.

El Al will also cease flying to 10 destinations and will replace most of the feeder flights operated within the USA by its part owned subsidiary North American Airlines (NAA) with direct flights and codeshare agreements with local airlines. NAA operates feeder flights for El Al from New York to Chicago, Los Angeles, Miami and Toronto.

Last year El Al reported a $109 million loss. Hermesh says restructuring should cut losses by $50 million. "This will allow us to reach 2003 in a stable status that will not threaten our commercial activity."

The board is also to demand compensation from the Israeli Government for the special security measures El Al has to undertake, and for the ban of Sabbath flights. Although El Al is already partially compensated for the security measures, there is no compensation for the flight ban.

The government is pushing ahead with the delayed privatisation of El Al. Industrialist Michael Levi has been named chairman of the airline's board.

Source: Flight International