The Israeli government plans to bail out national airline carrier El Al, granting loan guarantees for 80% of a $400 million loan.
It was agreed on Sunday evening at a meeting at the Finance Ministry that the loan would be dependent on a range of demands, the Israeli business daily Globes reported.
El Al airlines has suffered since the onset of the coronavirus outbreak and the cancellation of passenger flights.
The government is requiring the airline to make cuts beyond those already presented, including the firing of 2,000 employees, or around 33% of its workforce.
These will save about $50 million and include cutbacks on employee benefits of free flights for themselves and their families, salary cuts for senior executives and the board of directors and the temporary stoppage of granting dividends to shareholders, according to the report.
It is also expected that the airline owners invest NIS 100 million ($28.4 million) into the airline or to dilute their stake.
According to the report, El Al has paid around NIS 200 million ($56.9 million) in dividends over the past five years. The Finance Ministry does not want to gain shares in the airline in exchange for the loan. JN