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Cabinet May Shut Down El Al

The Cabinet is seriously considering closing down EI AI , Israel’s national air line, which lost $50 million this year and is expected to lose double that amount next year. The company’s management, headed since last’ month by millionaire industrialist Avraham Shavit, attributes the huge deficits to “inflated” wages paid to air crews. The EI AI Board of Directors will meet this Saturday night to discuss the situation after efforts to convince employes to accept a 50 percent wage cut proved fruitless.

EI AI flight crews receive part of their salaries in foreign currency and the company pays part of their income tax. Pilots and flight engineers are paid between IL 40, 000 ($II80) and IL 200,000 ($6000) a month after taxes. This amounts, in some cases where the higher wage prevails, to a gross income of about IL 420,000 or $12, 350 a month. The management wants to end these special privileges and reduce salaries by half in order for the air carrier to survive.

Shavit, who is president of the Israel Manu-factures Association, expressed doubt that the employes are aware of the gravity of the situation. “It seems they have not yet grasped it,” he said. “I will appeal to them to meet our demands. If that doesn’t help, there will be no alternative but to close down the company. “El Al is a subsidized government-owned carrier and the Cabinet is empowered to order it shut down.

Police have begun preparing for disorders should this come about. One El Al employe expressed fear of “riots if thousands of workers suddenly find themselves jobless.” A great deal of El Al ‘s financial difficulties have been attributed to labor strife, particularly wildcat strikes, work stoppages and slowdowns by ground maintenance personnel which have been a regular occurrence in recent years causing many flights to be cancelled with attendant losses of revenue.

Closure of the air line which links Israel with most major cities in North America, Europe and Africa, would cost the government between $200-$250 million, mainly in compensation to employes, El AI sources said.

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