Israel’s El Al enters talks over potential acquisition of Arkia

El Al has entered discussions with fellow Israeli carrier Arkia over a possible business combination, the flag-carrier has disclosed. Under the proposed transaction El Al would acquire Arkia shares in exchange for handing its own securities to Arkia shareholders. El Al has not confirmed the size of the transaction or the extent of the shareholdings being discussed. “No memorandum of understanding or binding agreement has been signed between the parties,” the carrier stresses, adding that the negotiations have only just started. “There is no certainty that the potential transaction will be concluded and a binding agreement signed.” It also points out that, even if the tie-up is agreed, it would still need to clear regulatory hurdles. El Al had previously attempted to merge with Israeli operator Israir, through a combination with El Al’s Sun D’Or division. But although the drawn-out discussions eventually resulted in an agreement, the plan was blocked by the Israeli competition authorities in 2018. Israir was sold by its parent company to an investment firm at the beginning of this year, during a bidding process in which a merger with Arkia was mooted. While El Al is exclusively a Boeing operator, Arkia uses a small fleet of Airbus A321neos and Embraer 195s. Both airlines have been struggling under the impact of the pandemic.<br/>