El Al measures designed to counter 2000 losses

By
|

NEW YORK -- The board of directors of El Al Airlines approved a number of cost-saving initiatives, including early retirement of some workers and selling a number of planes.

The carrier, the national airline of Israel, lost an estimated $109 million in 2000 and has been adversely impacted by the continued troubles in the Holy Land.

High fuel costs and stiffer competition from other carriers also have affected the company.

El Al will sell eight planes in the next year -- six Boeing 747-200s, which will completely remove that model from the carrier's fleet, and two 757s.

The firm has agreed to purchase three new 777s from Boeing and recently added four new 747-400s. El Al also will purchase another 777 and plans to lease two more 747-400s from the aircraft manufacturer.

The only models flying the U.S.-Israel route will be the 777s and the 747-400s.

Furthermore, El Al will cut some unprofitable routes, mainly to destinations in Europe, Asia and Africa. The line has not settled on which markets will be cut from its routing.

As part of its strategy to focus on business travelers, the carrier will maintain or even increase its service to other destinations, including Frankfurt, London, New York and Paris.

In North America, service to Chicago, Los Angeles, Miami and Toronto will not be affected by the changes.

The U.S. is seen as a major source market by El Al, as evidenced by the carrier's $3 million investment for improved facilities at New York's Kennedy.

El Al also has invested nearly $15 million to upgrade the first and business class areas of all of its 747-400 and 767 planes.

The elimination of some routes will necessitate the elimination of some jobs, and the carrier indicated it may reduce its workforce by 20%, though specific positions have not been identified.

Already, the company decided to offer about 300 employees early retirement.

With the changes, El Al expects to improve its annual results by about $50 million, according to a statement from president David Hermesh.

Comments
JDS Travel News JDS Viewpoints JDS Africa/MI