TEL AVIV (Reuters) - El Al Israel Airlines said on Wednesday it has reached an agreement with its administrative and engineering workers that will save the battered airline $88 million a year.
This follows an agreement reached two weeks ago with its flight attendants to save $30 million annually.
El Al said the three agreements will result in a reduction of 1,700 employees in its workforce of 6,500.
Some workers will be offered early retirement while others will be let go with enhanced compensation packages.
“The agreements signed have given a real chance to El Al’s recovery and to the possibility it will return to being the flag carrier of Israel’s aviation industry,” said Avi Edri, chairman of the transport workers union at the Histadrut labour federation.
On Monday El Al’s board agreed to a bailout that will likely put the carrier back under state ownership after the coronavirus crisis pushed it to the verge of bankruptcy.
The government has offered to back $250 million in bank loans while El Al must issue $150 million in shares, which the state will buy if no one else does. The bailout is contingent on its unions signing off on cost-cutting measures. A deal with pilots still needs to be reached.
El Al, which has reported losses for two years running and racked up debt to renew its fleet, suspended flights when Israel closed its borders and furloughed most of its employees.
Reporting by Tova Cohen; Editing by Steven Scheer