THE DETROIT JEWISH NEWS

El Al on Road to Recovery After $90 Million Loss

By MOSHE BARNEA
(Copyright 1981, JTA, Inc.)

There have been a good
many rumors about El Al's
imminent demise. Fortu-
nately, they are "somewhat
premature"; in fact, El Al is
alive, though not entirely
well, but sitting up'and tak-
ing nourishment, so to
speak.
It is true that the airline's

losses were of a magnitude
that shocked a public accus-
tomed to think in far
smaller figures. It is equally
true that the year in which
the company posted its
biggest loss, (in the vicinity
of $90 million), was the year
1 during which the interna-
tonal airline industry suf-
fered its worst deficits on re-
cord.

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Clearly the time had
come for drastic measures to
save the airline. The Israeli
government insisted on a
two-pronged attack on the
airline's woes. An Ameri-
can management firm was
called in whose experience
and record of salvaging ail-
ing American airlines had
been established. The gov-
ernment, a major share-
holder in El Al, insisted that
it come up with its own re-
covery program designed to
reach a break even point
within the next few years.
One of the first and
perhaps decisive steps
toward that goal was the
appointment of a new
board of directors with
the dynamic and forceful
Avraham Shavit,
president of the Israel
Manufacturers' Associa-
tion, at the helm. He
chose for his new chief
executive officer Yitzhak
Shander, a young and
energetic senior member
from among El Al's staff.

One immediate result of
these moves was an almost
miraculous improvement in
the on-time performance of
the airline and in the qual-
ity of inflight passenger
service, two of the airline's
most serious shortcomings
in previous years, which
undoubtedly had contrib-
uted a great deal to the air-
line's heavy deficits.
It would not be fair to as--
sume that all the airline's
problems were self-
inflicted. The soaring cost
of jet fuel, rapidly increas-
ing labor costs as well as the
world-wide inflationary and
recessionary trends were
responsible for El Al's and
the entire airline industry's
financial woes.
El Al's various unions, as

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well as the Israel Federa-
tion of, Labor (Histadrut),
have come to realize the
seriousness of the situation
and agreed to a five-year
labor peace during which
they would settle their dis-
agreements without dis-
rupting public travel.-
Fortunately, most of
what ailed El Al seems to
be behind it now. Total
recovery will not be
achieved overnight but
the airline is well on the
way to becoming one of
the world's best.
The purchase of new air-
craft and the installation of
the newest technological
equipment, such as "Apollo"
— the computerized reser-
vation system El Al shares
with United Airlines — all
are steps toward that goal.
A vigorous and aggres-
sive sales and marketing
program is under way under
the leadership of another of
El Al's bright young execu-
tives, Baruch Lilo, who
after extensive experience
in El Al's North American
sales- operation, stepped
into the crucial position of
vice president, commercial,
where the future marketing
plans of the airline will be
shaped.

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