TEL AVIV (Jun. 6)
El Al is planning to buy almost a quarter of the shares in North American Airlines (NAA), a five-month-old U.S. airline, which the Israeli national carrier has been using to ferry its passengers arriving at, or departing from, Kennedy Airport from destinations in Miami and Los Angeles.
The Israeli Transport Ministry and El Al’s temporary receiver, Amram Blum, ratified the plans. El Al assured them that the $400,000 investment, which will buy 24.9 percent of North American’s stock, should save some $3 million a year through the use of the American company’s one leased Boeing 757 plane rather than using El Al’s own jumbo jets.
U.S. law stipulates that no foreign entity may own more than 25 percent of an American airline.
Blum is quoted Wednesday by the Jerusalem Post as saying that the decision to invest in NAA was also influenced by the belief that the European Economic Community countries will put up new barriers once new regulations go into effect in 1992.
El Al, which carries little weight in the European Community, hopes that concerted U.S. pressure will wrest landing concessions from the E.C., in return for rights granted in the United States.
If this happens, El Al might well use NAA’s rights for itself, as well.
The cooperation with NAA increases from two to three the number of El Al’s weekly flights to Israel from Los Angeles, and eliminates stopovers in Boston, Chicago, Brussels and Amsterdam.
(JTA reporter Susan Birnbaum in New York contributed to this report.)