Israel's national airline El Al will sell off several of its jets and cut services to a number of international destinations as it struggles to cope with plummeting business borne of seven months of regional violence, Israeli newspapers reported on Tuesday, April 24.
According to the Haaretz newspaper, El Al's board of directors has decided to sell off six of its airplanes and to cut flights to destinations including Copenhagen, Chicago and Manchester after taking a severe economic drubbing since the outbreak of the intifada, or Palestinian uprising, in late September.
The Jerusalem Post newspaper said the planes to be put on the market are El Al's workhorse Boeing 747s.
The state-owned airline could not be reached for comment.
El Al signed a deal in December 1999 to buy three Boeing 777s, manufactured in the United Sates, to replace its aging 747s after delaying a decision on a potential $350 million order for European Airbus A330s which had aroused US ire.
Hundreds of El Al employees are likely to find themselves out of work as a result of the aircraft sales, with proceeds from the transactions going partly toward the purchase of a new 777 plane, the Jerusalem Post reported.
An initial draft report on El Al's financial performance in 2000 found a net loss of $109.4 million, as compared to a $16 million profit in 1999, Haaretz said.
The report cited a severe tourism slump following the outbreak of violence as an "immediate" cause of El Al's economic plight, according to Haaretz .
"These events have a significant influence on the company's revenues and profits," Haaretz quotes the report as saying.
"According to assessments at the time of the preparation of the report, the aforementioned events are likely to have an effect on the company's business results in 2001 as well."
Israel's Government Companies Authority has asked that El Al amend certain portions of the report so as to better highlight the airline's dire economic position, Haaretz said.
Some 64,000 Israelis have already been thrown out of work because of the economic crunch caused by the tide of violence, according to government statistics.
Israel's tourist industry was the hardest hit with hotel revenue dropping by 27-percent during the first three months of the intifada, and hotel employment slipping by 5,100 jobs at the end of 2000 as compared with the nine months before the unrest erupted, according to official statistics.
The industry is unlikely to take an upswing in the near future, as violence rages on and countries like the United States and Britain have issued travel warnings for parts of Israel and the Palestinian territories. — (AFP, Jerusalem)
© Agence France Presse 2001
© 2001 Mena Report (www.menareport.com)