El Al revenues could drop by $160 million due to coronavirus outbreak
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Israeli flag carrier El Al currently expects revenues to plunge by $140-160 million between January and April due to the novel coronavirus outbreak, the airline said Sunday in a filing to the Tel Aviv Stock Exchange.
The increased cut in revenues, the company said, follows a significant drop in consumer demand and shrinking operations due to increasingly strict restrictions on travel imposed by the Health Ministry.
According to the airline’s revised estimates, reduced operational costs will offset some of the declining revenues, with overall damage estimated to stand at between $70-90m. by the end of April.
The airline said talks are currently ongoing with the Finance Ministry to request financial support from the government, and is carrying out operational and financial measures to reduce its expenditure.
Last week, El Al announced its intention to lay off 1,000 permanent and temporary staff – almost one-sixth of the airline’s entire workforce – as it rolled out a series of cost-cutting measures implemented to “ensure the future” of the company. In addition, company executives and directors will be subject to a 20% wage cut, taking effect retroactively since March 1.
Due to travel restrictions imposed by health authorities, the carrier has canceled all flights to China, Hong Kong, Thailand and Italy, and postponed the long-awaited launch of a nonstop route to Tokyo scheduled for March 11. The airline has also cancelled a series of flights to European destinations, amid falling domestic and international demand.
