El Al is broke.
Their operations have been suspended since March 27th and all flights have been wiped off the schedule until October. They’re being sued for $400MM in refunds that they refuse to give customers who paid for flights that never operated. There’s no end in sight for when refunds will be offered and Israeli airline compensation law seems to change daily based on the whims of its airlines.
While the airline claims to the be the lifeline that Israel needs, that baton seems to have been passed onto United, which never stopped their Israel flights and is indeed ramping up to offer more service to Israel from more US cities than ever before. But at least El Al helps keep the cocaine flowing into the country.
The airline is currently controlled by the Borovitz family, which seeks a government bailout without losing control.
The Borovitz family didn’t expect anyone to want to buy the airline and that they’d be able to maintain control of the airline, but along came the Rozenberg’s with an offer to buy a controlling stake.
The offer was made by Eli Rozenberg, the mid-20s Israeli son of Kenny Rozenberg, US owner of Centers Heath Care nursing homes. Israel’s golden share of El Al requires that the owner of El Al be Israeli, so the $75MM offer for 45% of the airline had to come from Eli and he would be the airline’s owner.
Then things got ugly.
El Al then refused to meet as Eli lacked a permit to buy an airline, but then they agreed to meet after Israel granted him a permit.
El Al then sent a letter asking that Eli attend the meeting and answer questions, such as a response to why one of his father’s companies settled a case with the state of NY for $1.65MM. That’s rich coming from a company that has illegally held onto hundreds of millions in customer funds and refused refunds for cancelled flights. In turn, Eli’s lawyers threatened to sue El Al for defamation and accused El Al of trying to sabotage the sale in order to get the government bailout and retain control.
It boggles my mind that this is the way a prospective buyer is treated. Is that the equivalent of El Al learning from their unions about throwing chairs around in a negotiation?
It’s not surprising that El Al’s long history of bad behavior stems from the top.
I wish the Rozenbergs luck in dealing with El Al and turning around that ship. Hopefully they don’t pay $75MM, only to be told that the airline’s operations will remain suspended and that they can only get a refund after they wait around for a few years. And I don’t think a DOT complaint or a credit card dispute will help with that. 😉