El Al issues 'going concern' warning with Q4 results
The airline suspended passenger flights until at least the end of May and about 6,000 of its 6,500 workforce are on unpaid leave until June 30.
By REUTERSThe first of Israel's El Al Airlines order of 16 Boeing 787 Dreamliner jets lands at Ben Gurion International Airport, near Tel Aviv(photo credit: REUTERS)El Al Israel Airlines reported a loss in the fourth quarter of 2019 and warned that it could collapse should talks fail with the government to secure a state-backed loan.Israel’s flag carrier, which has twice delayed publishing its quarterly earnings, said on Thursday it lost $31.5 million in the final three months of 2019, compared with a $31.6 million loss a year earlier.The cash-strapped airline has been locked in negotiations with the Finance Ministry over government backing for 80% of a $400 million loan to help it through the coronavirus crisis.“Since there is uncertainty regarding the receipt of assistance, which is essential to enable the company to cope with the impact of the crisis at this stage, the company estimates there are significant doubts about its continued existence as a going concern,” El Al said.Foreigners are barred from entering the country and incoming Israelis must self-quarantine, which combined with a global decline in travel has hit El Al hard, leaving it with only its cargo business and occasional rescue flights.The airline suspended passenger flights until at least the end of May and about 6,000 of its 6,500 workforce are on unpaid leave until June 30.Chief Executive Gonen Usishkin said the airline has formulated a streamlining plan to allow it to return to profitability in the coming years.“But these steps will not suffice without Israeli government support,” he said.
