EL AL IS WARNING THAT it is being financially "crippled" by the Israeli Government's ban on its national carrier flying on the Jewish Sabbath and other holy days. There are also fears that the carrier's imminent privatisation could be affected.
President Raphael Harlev issued the warning as he revealed that the carrier had returned a disappointing $14 million net profit over 1994 and expects that to fall to $9 million this year.
Harlev puts the blame squarely on the ban, which was brought in by the Government in 1982 and effectively bars the carrier from providing Saturday services. He estimates that the carrier could otherwise have made a profit in the region of $50 million on a turnover, which grew by nearly 12% to above $1 billion.
Harlev adds that this "anomaly" in the airline's operations has depressed assessments of the company's true market value ahead of its pending privatisation.
Recent valuations have put El Al's worth at $150 million, significantly lower than earlier Government estimates of $200 million. The Sabbath ban, together with El Al's quarter share in its hefty, security costs are blamed for the under-shoot.
Sources within the airline fear that the valuation issue could delay the privatisation process, which is scheduled to begin in May with a flotation on the Tel Aviv stock exchange.
Source: Flight International
