El Al airline called on Prime Minister Benjamin Netanyahu to save it on Wednesday, rejecting what it said were impossible conditions for state-backed loans.
Israel’s government is demanding an overhaul of El Al, including layoffs, before agreeing to a lifeline.
The cash-strapped airline has been locked in negotiations with Finance Ministry officials over Israel backing a $400 million loan to help it through the coronavirus crisis.
Foreign visitors are barred from entering the country and incoming Israelis must be quarantined, which combined with a global fall in demand for travel has hit El Al hard.
El Al CEO Gonen Usiskin said in a letter to Netanyahu that the demands would send the airline into liquidation.
"We ask that you instruct the Finance Ministry to amend the plan,” Usishkin wrote, adding it “refuses to connect El Al to a ventilator, as most countries in the world have done”.
El Al has committed to refunding the value of unused tickets to customers totaling NIS 1 billion ($285 million), but if it goes bankrupt, customers would lose this money, he said.
Usishkin warned that without an immediate decision, Israel will lose its airline, which flies even during times of crisis.
The Prime Minister’s Office declined to comment.
Netanyahu plans to meet Finance Ministry officials later on Wednesday.
The Finance Ministry in a statement called on El Al to return to negotiations and said threats to the government were not a substitute for talks.
The government has argued the airline's problems, including a bloated workforce, high salaries and a weak balance sheet, began well before the COVID-19 outbreak.
After delaying the release of fourth quarter results twice, El Al plans to report on Thursday. r said it could include a "going concern" warning.