Arkia Airline Changes Hands Amidst Employee Labor Dispute
Translated & summarized from NEWSru Israel by baba
A group of investors is set to acquire a controlling stake in Arkia airline for $30 million, as announced by current owners the Nakash brothers. The deal comes as Arkia employees declared a labor dispute, protesting route cancellations and staff cuts. The airline has incurred significant losses this year, estimated at $30-40 million, and has already reduced its flight schedule. Previous sale attempts have failed, including one with investor Ezra Unger.
The story in 5 lines · by baba
- Investors will acquire a controlling stake in Arkia airline, injecting $30 million.
- Arkia employees declared a labor dispute protesting route cancellations and staff cuts.
- The airline has suffered losses of approximately $30 million this year.
- Arkia has reduced its flight schedule, including suspending flights to London.
- Previous attempts to sell the airline over the past 18 months have been unsuccessful.
A group of investors has signed an agreement to acquire a controlling stake in the Israeli airline Arkia, injecting $30 million into the company. The current owners, brothers Rafi, Joe, and Avi Nakash, announced the deal on Thursday, November 12. Avi Hormaro, CEO of the Nakash Group and appointed by the brothers to lead the company's recovery, managed the transaction on their behalf.
The purchasing group includes Einav Adiv-Barer, owner of the TLV Medical Center chain; her brother Yaron Adiv; Kidan Dahari, owner of real estate firms Ishpro and Tnuport; and Yariv Lerner, Chairman of the Board and co-owner of the home goods chain Negev Ceramics.
The sale announcement coincided with the Transport Workers Union declaring a labor dispute at Arkia. Employees are protesting efficiency measures and staff reductions, including route cancellations, implemented by the owners without consulting personnel representatives. They fear the company may become insolvent. Employees, who own 20% of Arkia's shares, also claim the owners are not finalizing the sale.
Arkia has reportedly lost approximately $30 million since the beginning of the year, with year-end losses potentially reaching $30-40 million. The airline has already reduced its flight schedule, suspending flights from Tel Aviv to London until December 12.
Previous attempts to sell Arkia, which has been on the market for over 18 months, have failed. Negotiations with ultra-Orthodox investor Ezra Unger collapsed partly due to employee refusal to fly on Saturdays. Businessman Elliot Zamell claimed a binding purchase agreement for about 140 million shekels was signed with him and sought 20 million shekels in compensation for its termination, a claim the Nakash brothers denied. Avi Hormaro had also previously negotiated with Israir and El Al.
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