The finance and transportation ministries of Israel said in a joint statement on Sunday that Israeli cabinet members authorised an additional bailout plan for airlines further damaged by the spread of the Delta strain of the coronavirus.
For all of Israel’s airlines, total state help would not exceed $44 million, and it would be in the form of three-year bonds with no interest.
At maturity, a publicly traded airline will be able to convert the bond into shares assigned to the state. In that event, the government would not own more than 24 percent of an airline’s stock and would not be able to vote.
Merav Michaeli, the Minister of Transportation, said that the plan strikes a balance between the government’s responsibilities and those of the airlines’ shareholders.
During the COVID-19 epidemic, Israel’s airlines — flag carrier El Al Israel Airlines, Arkia and Israir — were heavily hit, with the country’s borders mainly blocked to international tourists since March 2020.
Tourists who have been vaccinated against COVID-19 within six months of their last dosage have been able to enter the country since the beginning of November.
The airline has been losing money for the past three years and has loaded up debt to replace its fleet. As part of a rehabilitation plan mandated by the government to get a $210 million bailout package earlier this year, it let off 1,900 employees, or about one-third of its workforce, and decreased its fleet to 29 from 45.
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