El Al officially has a new owner in Eli Rozenberg, a 27-year-old American-Israeli investor. The Israeli flag carrier has struggled in the last few years, with the current crisis driving it to suspend all flights. Eli Rozenberg was finally the sole bidder for El Al, acquiring a 42.85% in the airlines for $150 million. So who is he and what are his plans for the embattled airline?
Who is El Al’s new owner?
Eli Rozenberg showed interest in purchasing El Al early on, hoping to revive the Israeli flag carrier. The 27-year-old is the son of New York-based businessman Kenny (Naftali) Rozenberg, a renowned healthcare entrepreneur. Kenny Rozenberg operates Centers Health Care, which runs 50 facilities, including nursing homes, throughout the US.
Before he was CEO, Kenny Rozenberg was a paramedic. Today, he stepped out of his office and on the streets as a volunteer paramedic pic.twitter.com/uzWtflx7XL
— Centers Health Care (@CentersHealth) July 27, 2017
Since one of the preconditions of owning El Al is being an Israeli citizen, Eli will be the owner of the carrier. The Rozenberg family seems to have no history in the aviation industry, setting up the prospects of the newcomers shaking up the industry or struggling to revive the debt-heavy El Al.
The bid officially wrapped up today, with Kanfei Nesharim (Eli Rozenberg’s company) purchasing 42.85% of El Al for $150 million. The final bid is much higher than previous offers, which started at just half the amount at $75 million. After a contentious process, which saw both sides in a tug-of-war, the bid was finally accepted today and Eli Rozenberg took ownership.
Eli Rozenberg has his work cut out
Now that the bidding process has wrapped up, the owner will have to get to work reviving the flag carrier. El Al remains grounded for now with plans to restart passenger flights in October to a handful of destinations. Cargo flights could start a soon as next week, according to FlightGlobal.
Before resuming operations, the airline has to pay off its debts to numerous creditors, including the airport authorities who previously grounded the carrier. Thanks to the recent cash injection from the government bailout and stock sale, the airline should be ready to fly once again.
However, El Al’s problems run a lot deeper than short-term repayments. The carrier has over $2bn in debt and has losing been losing money for years. In a statement, the new owning company said it will focus on restoring passenger trust and guaranteeing the jobs of thousands of El Al employees, many of whom have been on unpaid leave for months.
The focus will also be on punctuality and upgraded service from now on, including better meals in all classes. This will definitely be a positive for travelers but could pose increasing costs for the carrier. For now, it’s a bit early to judge the new owner’s management strategy, which will only see effects in the coming months.
The recent weeks have seen a seismic shift in Israel-Middle East relations. In the span of a month, Israel signed peace accords with the UAE and Bahrain, ending a decades-long blockade between the countries. To mark the historic achievement, an El Al flight made its way from Tel Aviv to Abu Dhabi on August 31st, marking the first flight between the countries.
The opening of the Middle East to Israeli carriers presents a massive opportunity for El Al. The airline can take shorter routes (previously much of Middle Eastern airspace was banned to Israel) and add new destinations, moving thousands of passengers between the countries.
As Eli Rozenberg takes over, he will have the chance to reshape El Al and revive the beleaguered carrier. While there is much to do, the opportunities are huge and exciting. We’ll be sure to follow El Al’s progress closely in these unique times and keep you informed!
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