Boeing 787 aircrafts (Illustration)
El Al gives up billion dollar deal
Israeli airline announces giving up option to buy 7-10 Boeing 787 aircraft meant for receipt in 2014. El Al: Decision was made based on renewed examination of aircraft types to be used in future
The Israeli airline El Al gave up an option Monday to equip itself with 7-10 Boeing 787 aircraft.
The company was meant to purchase the aircraft by 2014, at a cost of about USD 800 million and USD 1 billion.
However, the company reported that El Al would not give up on plans to order two Boeing 777 aircraft which would be received in the summer of 2007. The decision to give up the Boeing 787 aircraft was due to a reevaluation of the type of equipment it would use in the future.
El Al sources explained that the decision was expected to improve the company’s financial situation. The company said it was re-organizing, with changes such as management retirement, and contracted employee dismissals, as well as the sale of several aircraft.
El Al management was also interested in reducing the number of permanent staff, but could not do so due to a union opposition, and the two entities began a negotiation that has not yet concluded.
The company’s re-organization plan also included canceling and cutting back on unprofitable flights, and conversely, adding more flights to the United States and the Far East.
El Al began implementing its re-organization plan after a row of unsuccessful financial reports.
