El Al layoffs to start next week; workers declare labor dispute.
By EYTAN HALON MARCH 12, 2020 18:50 The Jerusalem Post
Israeli airline El Al will halt flights next week to most destinations worldwide, including cities across the United States and Europe, the carrier said on Thursday.Citing decreasing customer demand and stringent government measures to combat the novel coronavirus outbreak, El Al CEO Gonen Usishkin said the carrier would continue its regular services to New York, Newark, Toronto, London, Paris and Johannesburg, in order to carry both passengers and freight.Read More Related Articles
“In recent days and hours, reports have increased regarding the entire cessation of foreign airlines at Ben-Gurion Airport due to various directives and declining demand,” Usishkin said. “After an assessment of the situation, El Al is forced to gradually suspend its operations to most of its destinations.”Flights to most European destinations, except for London and Paris, will end by Sunday night, the airline said. Final flights to Boston and Mumbai will depart on March 15; to San Francisco, Moscow and Brussels on March 16; and to Miami and Los Angeles on March 18.
In a letter to staff on Thursday, Usishkin confirmed that a total of 1,000 El Al employees will be laid off and the majority of remaining workers will be placed on unpaid leave early next week. Confirmation of the cuts come after lengthy negotiations collapsed on Wednesday night between company management and representatives from the Histadrut labor federation and the El Al workers union. The Histadrut declared a labor dispute on Thursday afternoon, alleging that El Al executives had “lacked good faith” in the discussions and sought to “exploit” the current crisis.
Usishkin said 1,000 permanent and temporary employees would be summoned for a pre-layoff hearing next week, and the “majority of the company’s workers” will be placed on unpaid leave. Executives and senior management will take a pay cut, and work processes will be modified to enable the company to reduce operating costs. Employees on unpaid leave will be eligible to receive financial support from the National Insurance Institute (Bituach Leumi).
Earlier in the day, about 2,000 El Al employees protested and burned tires outside the airline’s headquarters at Ben-Gurion Airport in opposition to the cuts.“It is a slippery and dangerous slope that must be stopped immediately,” responded Usishkin. “I demand that the leaders of the workers take responsibility and prevent, in any way, a dangerous deterioration into physical and verbal violence.”
According to a statement by the Histadrut, talks to reduce the cuts collapsed late on Wednesday night after El Al management “outright rejected any proposal placed on the table.” Proposals included company employees waiving $1 billion over a seven-year period, including unpaid leave of staff and “additional painful concessions.”
Usishkin said Israel’s flagship airline is currently in discussions with officials from the Finance Ministry for assistance during the outbreak of the novel coronavirus, as well as a post-outbreak recovery plan and a future program to assist growth.“Under the circumstances and the magnitude of the current crisis, it cannot be endured without letting workers go, even with the great sadness that we all feel,” said Usishkin. “I am full of pain for those who will need to say goodbye, but my responsibility is greater for the remainder of El Al personnel. I will not let the livelihoods of thousands of households be threatened under my watch.”
In a filing to the Tel Aviv Stock Exchange on Wednesday, El Al said the extension of self-quarantine requirements to all individuals arriving in Israel were expected to have “fundamentally adverse effect” on the company’s operations.
Prior to the announcement made by Prime Minister Benjamin Netanyahu on Monday night, El Al said it expected revenues between January and April to drop by $140 million-$160m. The airline said it is now unable to estimate the extent of the damage.