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Israel Reaches Security Deal With El Al to End Airline Strikes

April 22 (Bloomberg) -- Israel’s Finance Ministry reached an accord with El Al Israel Airlines Ltd. over its security costs, a deal the Histadrut labor union federation said would end a strike that has disrupted flights since yesterday.

The agreement also removed a threat by airport workers to walk off the job tomorrow, Histadrut said by text message. El Al flights, along with those of two other local airlines, were halted since yesterday morning in protest at an aviation accord with the European Union. El Al spokeswomen didn’t immediately answer calls to their mobile phones after office hours.

The Finance Ministry said in an e-mailed statement that it agreed to compensate Israel’s airline for its security costs that otherwise would make it less competitive. Finance Minister Yair Lapid said he saw no reason for the strike to continue.

The government has said the “Open Skies” agreement with the EU will increase competition in air travel, resulting in lower fares and more tourist arrivals. The airline workers say the accord will destroy the Israeli civil aviation industry by opening them to unfair competition.

The government will pay 97.5 percent of El Al’s security costs as part of the new accord, up from a previous 80 percent, the Haaretz newspaper said on its website.

Lapid called “Open Skies” a “done deal” and a good agreement for the citizens of Israel, for the Israeli economy, and for tourism.

El Al closed up 2.5 percent to 0.544 shekel today, after dropping by more than 13 percent in the two previous trading sessions over the strike.

To contact the reporters on this story: Gwen Ackerman in Jerusalem at gackerman@bloomberg.net; Alisa Odenheimer in Jerusalem at aodenheimer@bloomberg.net

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net

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