Israel’s El Al Airlines begins talks to buy small rival Arkia
JERUSALEM, October 19 (Reuters) – El Al Israel Airlines (ELAL.TA) has announced that it has entered into talks with Arkia to examine a possible acquisition of its small rival.
In a regulatory filing in Tel Aviv, the Israeli national airline said it was considering buying Arkia and in exchange it would issue its own shares to Arkia shareholders.
El Al, hit hard during the COVID-19 pandemic as Israel’s borders have largely been closed to foreign tourists since March 2020, said negotiations were early and no binding agreement had been signed.
In exchange for a government bailout, El Al – which changed ownership and management last year – was forced to downsize by a third, eliminate roads and downsize its fleet of Boeing (BN) at 29 against 45..
Private property of the Nakash group, Arkia, also short of financial means due to the pandemic, has seven planes and mainly serves domestic routes and to Europe using Embraer and Airbus planes.
El Al had sought in 2018 to buy Israir, another small Israeli carrier that serves the resort town of Eilat in the south and a multitude of European cities, but the Israeli competition regulator has not authorized the merger.
Reporting by Steven Scheer Editing by Ari Rabinovitch
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