The government’s privatization committee has approved the sale of 51 percent of El Al Airlines to the general public, paving the way for privatizing the national carrier.
The announcement followed a meeting of the Ministerial Committee for Privatization, which accepted the recommendations of Transportation Minister Yisrael Kessar and Finance Minister Avraham Shohat to privatize El Al.
The actual sale of shares was expected to take place in October, when the once-ailing airline is to be taken out of the 13-year-long receivership under which it has been operating.
A board of directors for El Al will be named once the company is out of receivership.
Kessar opposed the sale of a controlling interest to a private investor in order to protect the airline’s workers, who have already expressed fears about their salaries and working conditions under new owners.
“El Al is a national carrier and its shares should not be sold to an investor who would be free to do as he pleased with the airline,” said Kessar, a former head of the Histadrut trade union federation.
“In every privatization process, one must try not to harm the workers who contributed to the company’s positive financial situation,” he added.
El Al was put into receivership by the government 13 years ago when it suffered heavy losses in the wake of numerous strikes by one or more of the 12 local unions representing El Al workers.
At its meeting, the privatization committee discussed El Al’s costs for maintaining security.
Security costs total approximately $55 million a year, some 80 percent of which is currently paid for by the government.
Kessar and Shohat will decide during the privatization process how the security costs, which represent a heavy financial burden for the airline, will be shared by the government and El Al shareholders.
A Transport Ministry spokesman said the government’s privatization committee will decide at a later date how to dispose of the remaining 49 percent stake in the airline.
The 51 percent share to be sold to the public will probably be offered first to El Al employees and then to the public in an offering on the Tel Aviv and New York stock exchanges.
El Al has yet to report its 1993 results, but a company official has said the carrier had net profits last year of approximately $10 million on revenues of more than $1 billion.
El Al currently operates an all-Boeing fleet of 22 jets, and recently ordered a third Boeing 747-400 jumbo jet for delivery next May.