Israel's El Al Airlines has agreed to pay a bigger share of its security costs from this year, it said on Monday, under a new deal with the government that local media estimate will cost the airline around $10 million a year.
Over the first nine months of 2024 El Al's profit soared 439% to $415 million © Mena Today
Israel's El Al Airlines has agreed to pay a bigger share of its security costs from this year, it said on Monday, under a new deal with the government that local media estimate will cost the airline around $10 million a year.
Under the agreement, which still needs final approval, the state will pay 95% of the Israeli flag carrier's security expenses this year and 94% in 2026, tapering to 92.5% from 2029, El Al said.
The government paid 97.5% of the airline's security-related expenses last year, having taken on more and more of the cost since 2010, when it paid 60%.
A spokesperson declined to say how much the increase in its payments would cost the airline.
El Al, regarded as having among the most stringent security in the industry, is due to report annual earnings next week.
Over the first nine months of 2024 El Al's profit soared 439% to $415 million as the war with Palestinian militant group Hamas and incoming missile attacks from Lebanon's Hezbollah and Yemen's Houthis prompted most foreign carriers to halt flights, which are only now being reinstated following ceasefire agreements.
El Al said it was also in advanced negotiations with the government regarding a reduction in the company's obligations. While it declined to elaborate, El Al has long lobbied the state for permission to resume dividend payments and taking on more of its own security costs could open the way towards concessions on the payout.
The government imposed a number of restrictions on El Al in 2021 - a year after it changed ownership - when it received a $210 million bailout package after being forced to halt most flights during the Covid pandemic.
Its shares were up 2.6% in afternoon trading in Tel Aviv.
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