Arkia Crisis: Temporary Win for Company Employees

In depth

Arkia's board decided to forgo a capital injection that would have diluted employee shares. The decision was made at a meeting attended by the Neeksh brothers and employee representatives, after the employees threatened a labor dispute backed by the Histadrut. Following the decision, the employees decided not to declare a labor dispute at this stage. The capital injection plan was canceled.

The company has lost more than $30 million since the beginning of the year, and its capital needs reach about $40 million. The controlling shareholders are freezing a new injection at this stage, a shareholder loan is being considered alongside talks on a sale to outside investors. The controlling shareholders want to sell their holdings, according to Arkia CEO Oz Berlovitz, who told employees.

Israir is examining an acquisition of Arkia, according to a letter from Israir CEO Uri Sirkis to employees. Sirkis said this is only an initial examination stage and there is no certainty the deal will go through. According to him, such a merger would create an aviation group with a fleet of 20 aircraft. "This is not a takeover, but a strengthening of Israeli aviation." Arkia itself said its operations are continuing as usual.