Israel's El Al to become leaner after government bailout

El Al’s fate is expected to be decided in the coming days, with the Israeli airline looking to reach a deal with workers on job and spending cuts to get government aid. An official at El Al, which has put almost all of its 6,500 workers on unpaid leave and suspended passenger service, told Reuters that its board will choose between two proposals. Avi Edri, chairperson of the transport workers union at the Histadrut labour federation, said 2,000 job cuts are likely, as well as salary reductions to pilots. “Without (government) money El Al will go bankrupt,” Edri said. “We don’t have any choice but to dismiss workers.” El Al has signed a deal with flight attendants and is in talks with mechanics and pilots. Of the two proposals on the table, one includes $400m in bank loans, 82.5% guaranteed by the state, and El Al issuing 150m shekels ($43m) in shares, requiring capital from controlling shareholders. A second is a $250m, 75% state-backed loan plus a $150 million share offer, in which the government commits to buy whatever shares are not purchased by the public. Either decision will drastically alter El Al since a key condition for receiving the loans is achieving $400m of cost savings a year.<br/>