Behadrei HaredimEconomy17:15

Arkia Airline Changes Ownership Amid Financial Woes and Labor Dispute

By מאיר שלם

Translated & summarized from Behadrei Haredim by baba

ReligiousNeutral tone

Hebrew · 7 newsrooms covering

Israeli airline Arkia is being sold by its owners, the Nakash brothers, to a new group of investors for tens of millions of dollars, ending a 20-year ownership period. The airline is currently facing significant financial losses, estimated at $30 million this year, and a labor dispute with its employees. The new owners aim to stabilize the company and strengthen its operations.

The story in 5 lines · by baba

Brothers Rafi, Joe, and Avi Nakash are selling their controlling stake in Arkia airline to new investors.
The deal will inject tens of millions of dollars into the airline, which has lost $30 million this year.
Arkia is also experiencing a labor dispute with its employees over efficiency measures and staff reductions.
The new investors aim to stabilize the company and strengthen its operations.
Employees hold 20% of Arkia's shares, while the Nakash brothers own 80%.

Arkia Airline Changes Ownership Amid Financial Woes and Labor Dispute — Editorial illustration generated by baba News, not a photograph of the event.

Israeli airline Arkia is set to undergo a significant ownership change, with brothers Rafi, Joe, and Avi Nakash agreeing to sell their controlling stake to a new group of investors. This deal, which will inject tens of millions of dollars into the company, is expected to conclude the Nakash family's 20-year ownership period.

The acquiring consortium includes businessmen Einav Adib-Berrer, Kidan Dahari, Yaron Adib, and Yariv Lerner. The new investors have stated their intention to stabilize the company's financial situation and bolster its operations. "We believe in Arkia and in the Israeli aviation sector. Arkia is a veteran brand with a professional and dedicated workforce, and we are entering the company with long-term commitment," they announced.

The sale occurs during a challenging period for Arkia. The airline has incurred losses estimated at $30 million since the beginning of the year, with projections indicating an annual loss of $30 to $40 million. As part of efficiency measures, Arkia has reduced its operations, including suspending flights on the Tel Aviv-London route until December 12.

In addition to financial difficulties, Arkia is facing a labor dispute. The Histadrut labor union has declared a labor dispute following efficiency measures, staff reductions, and route cancellations, which employees claim were implemented without consultation. Employees hold 20% of the company's shares, while the Nakash brothers own 80%.

Attempts to sell Arkia have been ongoing for an extended period, with previous negotiations involving investors like Ezra Unger and Eliot Zamel, as well as potential sales to other aviation entities such as Israir and El Al. However, these talks did not result in a deal. The upcoming change in ownership presents Arkia with the primary challenge of addressing its losses, stabilizing operations, and resolving the conflict with its employees.