Treasury agrees to provide Israeli airlines with loans

The Ministry of Finance will extend loans to El Al, Arkia and Israir that can be converted to shares for purchase by the state in a public offering. Israel's Ministry of Finance has agreed in principle an assistance package for Israel's airlines. The state will extend a balloon loan over two years while the controlling shareholders will commit to inject more capital into their companies. The ratio between the amount injected by the state and by the owners has yet to be decided. The Ministry of Finance estimates that El Al will need a loan of $150-200m and Arkia Israeli, and Israir Airlines will need $20m each. A source in the Ministry of Finance said, "The airlines have taken a big hit in the third quarter, which is supposed to be the most profitable quarter for the companies. We sat with all the companies to understand their cash flow situation and we're forming a plan on the basis of this. The aim is to see, on the assumption that Covid will be staying with us on the current format that the companies can survive in cash flow terms in the near future and streamlining will also be subject to this." The Ministry of Finance has not defined what it means by streamlining at the three airlines. <br/>