Israeli government refuses $350 million loan to El Al

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Uncertainty grows at El Al. The Israeli flag carrier has been refused a $350 million rescue loan by the Israeli Finance Ministry, whose representatives said they don’t believe that the airline will be able to repay its loan, after a meeting on Sunday between El Al, Israel’s Discount Bank CEO and the Finance Ministry. The airline will appeal the decision to Benjamin Netanyahu, Prime Minister of Israel.

Negotiations have been ongoing for nearly 2 months with the airline to try to reach an agreement, an economist said.

Israir and Arkia, the 2 other Israeli airlines, meet criteria to get the loan, while El Al needs additional negotiations.

El Al said to the Tel Aviv Stock Exchange that the airline has now turned to the Israeli authorities for help, and that “state support in the near term is essential to allow the company to cope with the consequences of the coronavirus crisis.”

Otherwise, airline’s CEO Gonen Usishkin said: “to allow the airline to collapse means losing its NIS 2.5 billion [$690 million] contribution to GDP, its professional experience and commercial ties that … took years to accumulate, and especially the heavy costs, amounting to billions of dollars, merely to recreate the air fleet.”

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