Court permits El Al to withdraw millions from employee pension funds
El Al will be permitted to withdraw the funds on May 10, the court said, unless the National Labor Court holds that it is necessary delay the execution of the decision.
By EYTAN HALONAn Israeli flag is seen on the first of Israel's El Al Airlines order of 16 Boeing 787-9 Dreamliner jets, as it lands at Ben Gurion International Airport, near Tel Aviv(photo credit: REUTERS/AMIR COHEN)
The Tel Aviv District Labor Court approved the withdrawal by El Al of NIS 105 million in surplus finances from worker pension funds on Sunday, as the Israeli flagship carrier battles to stay afloat amid the coronavirus pandemic.More than NIS 319m. is currently being held in funds managed by Clal Pension and Provident Funds and Psagot Provident Funds and Pension. The funds were established to protect workers during the privatization of the airline in 2003, and were designated to assist retiring employees.Despite opposition from the El Al workers union, who claimed that the surplus funds belong to the workers, a total of NIS 115m. was requested by El Al, the Histadrut trade federation and the Finance Ministry.The majority of workers eligible to benefit from the pension funds have already retired, the court highlighted, and scheduled payments for the remaining 249 eligible employees who started working for the airline before 1982 is already being held in personal pension funds.El Al will be permitted to withdraw the funds on May 10, the court said, unless the National Labor Court holds that it is necessary to delay the execution of the decision.The court decision arrives as El Al continues negotiations with the Finance Ministry and Bank Discount to finalize a rescue package to enable the airline to continue operations.Negotiations for a government-secured loan valued at approximately $350m. are yet to reach a conclusion after eight weeks of talks. While a decision is likely to be finalized this week, any possible agreement is likely to require the redundancy of 1,600 of the airline's 6,500-strong workforce.Last week, the Israel Securities Authority granted El Al an additional two weeks to publish its financial results for 2019. The results must now be published no later than May 14.In a filing to the Tel Aviv Stock Exchange, the airline said its request to delay the publication resulted from dedicating the majority of its resources to dealing with the current coronavirus crisis and the need to place most of its financial team on unpaid leave. Approximately 95% of the airline's staff are currently on unpaid leave.According to data published by the International Air Transport Association (IATA) on Wednesday, global passenger traffic plunged 52.9% in March 2020 compared to the same month last year.
This was the largest decline in aviation traffic in recent history, the IATI said, with global passenger volumes returning to levels seen in 2006."March was a disastrous month for aviation," said IATI director-general and CEO Alexandre de Juniac."Airlines progressively felt the growing impact of the COVID-19 related border closings and restrictions on mobility, including in domestic markets. Demand was at the same level it was in 2006 but we have the fleets and employees for double that. Worse, we know that the situation deteriorated even more in April and most signs point to a slow recovery."
