El Al reiterates concerns over survival as losses mount
El Al has reiterated that a financial support scheme is critical to the airline’s survival, as it disclosed a net Q1 loss of nearly $140m. El Al says financial assistance is “essential” to its being able to deal with the coronavirus crisis. At the end of Q1, on 31 March, the company’s current assets totalled $324m, down by $162m, while its current liabilities had risen by $1.1b to nearly $2.2b. El Al attributes this sharp increase – and the consequent trebling of working-capital deficit – to a requirement that, owing to the company’s situation, certain loans be classified as short-term liabilities. Its non-current assets stood at $3.06b while non-current liabilities reached $1.27b, leaving the company in overall negative equity. “There are significant doubts about the company’s continued existence as a going concern,” it warns. El Al has also had to cope with the impact of deteriorating aircraft values, because conditions attached to certain loans require a minimum ratio to be maintained between the value of aircraft and the loans secured on them. Non-compliance would give the lending banks the right to a $30m payment, but the airline has obtained a waiver from the ratio requirement.<br/>
https://portal.staralliance.com/cms/news/hot-topics/2020-07-02/unaligned/el-al-reiterates-concerns-over-survival-as-losses-mount
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El Al reiterates concerns over survival as losses mount
El Al has reiterated that a financial support scheme is critical to the airline’s survival, as it disclosed a net Q1 loss of nearly $140m. El Al says financial assistance is “essential” to its being able to deal with the coronavirus crisis. At the end of Q1, on 31 March, the company’s current assets totalled $324m, down by $162m, while its current liabilities had risen by $1.1b to nearly $2.2b. El Al attributes this sharp increase – and the consequent trebling of working-capital deficit – to a requirement that, owing to the company’s situation, certain loans be classified as short-term liabilities. Its non-current assets stood at $3.06b while non-current liabilities reached $1.27b, leaving the company in overall negative equity. “There are significant doubts about the company’s continued existence as a going concern,” it warns. El Al has also had to cope with the impact of deteriorating aircraft values, because conditions attached to certain loans require a minimum ratio to be maintained between the value of aircraft and the loans secured on them. Non-compliance would give the lending banks the right to a $30m payment, but the airline has obtained a waiver from the ratio requirement.<br/>
