According to an agreement to be signed Thursday, Israel’s Finance ministry will pay El Al $210 million in advance for tickets to be issued to flight security personnel over the next 20 years. The state will still participates in the cost of employing the flight security guards, but will be absolved of paying for their tickets, which over time will save tens of millions of shekels. According to the finance ministry, the amount paid in advance to El Al is lower than the actual price of the tickets.
El Al needs the advance funds to pay its suppliers and refund customers who are yet to receive the money they paid for flights that have been cancelled over the past year because of the Corona pandemic.
El Al has conducted two public offerings over the past six months, in which its controlling shareholder Eli Rozenberg invested $110 million and $50 million respectively. Rozenberg plans to invest another $40 million come the next offering, bringing his invested in the airline to more than $200 million.
The down payment transaction came to life after the failure of a year-long negotiation between El Al and Bank Leumi and Bank Discount for a $300 million. The two banks had no problem paying the 82.5% of the loan that was guaranteed by the Israeli government, but demanded an exorbitant interest on the remaining 17.5% because lending money to an airline these days can be tricky.
Selfless patriots every last one of them.