Bloomberg the Company

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Follow Us

Industry Products

El Al Gains as Job Cuts Helping Competitiveness: Tel Aviv Mover

Don't Miss Out —
Follow us on:

Feb. 12 (Bloomberg) -- El Al Israel Airlines Ltd. rose to a two-month high after the country’s flagship carrier said it would cut 200 temporary jobs as it seeks to return to profit.

The shares of the Lod, Israel-based carrier advanced 3.6 percent to 0.568 shekel in Tel Aviv, the strongest close since Dec. 13. The advance brought the company’s market value to 282 million shekels ($76 million). Israel’s benchmark index, the TA-25, advanced 0.9 percent.

El Al shares sank to a record low in 2012 as Brent oil prices advanced for a fourth year. The company has also been hurt by intensifying competition, with European discount carriers expanding in the local market. The airline is struggling to boost profitability, posting losses in three of the last four years. It said in January it’s in talks with Fimi Opportunity Funds for an investment in the company.

“Cost cutting is needed to help El Al cope with the strong competition in the industry,” Sharon Naveh, head of institutional and international sales at Migdal Capital Markets Ltd., said by phone from Tel Aviv.

The job cuts are part of efficiency measures and further organizational changes that reduce costs are planned, according to a company filing with the Tel-Aviv bourse today. Talks with workers and union representatives are under way to renew employment contracts and review efficiency steps, according to the statement.

“The need for efficiency and to cut costs is an imperative, so that we can continue to cope with the challenges and the rising competition,” Eliezer Shkedi, El Al’s chief executive officer said in today’s statement.

Israel is in talks with the European Union over the signing of a so-called Open Skies Agreement that will allow carriers to fly to more destinations. El Al said in July this agreement may negatively affect the company. Global air passenger traffic last year grew 5.3 percent, lower than 2011’s 5.9 percent figure, the International Air Transport Association said Jan. 31.

To contact the reporter on this story: Shoshanna Solomon in Tel Aviv at ssolomon22@bloomberg.net

To contact the editor responsible for this story: Alaa Shahine at asalha@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.