An airline that’s been closed for 6 months will now be controlled by a 27-year-old
This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.
When the going gets tough, stop and start over.
That’s exactly what El Al, the flag carrier of Israel, is doing. Since March, the airline has effectively ceased operations. The carrier suspended most commercial flights due to the Israeli border closure and has only operated a handful of repatriation, charter and cargo flights since.
Even before the shutdown, El Al was bleeding cash, having recently invested in a slew of new Dreamliner jets and burdened by a high-cost labor structure.
In order to receive a 75% state-backed loan of $250 million, the government required the airline to hold a public share offering. That offering just happened on Wednesday, and the controlling shareholder is now none other than a 27-year-old religious studies student. (Yes, you read that right.)
Stay up-to-date on airline and aviation news by signing up for our brand-new aviation newsletter.
But how exactly did this transpire?
Well, let’s back up.
Israeli law requires that the majority owner of El Al be Israeli. Kenny Rozenberg, CEO of New York-based nursing home chain Centers Health Care, expressed interest in El Al. But, the problem is he’s not Israeli.
So, what’s the next best thing? Have his son Eli do it. The younger Rozenberg was able enter the fray for El Al with the newly created Kanfei Nesharim Aviation group that offered $107 million for the carrier, according to a Reuters. (The name Kanfei Nesharim is Hebrew for the “wings of eagles,” a biblical reference to how God will supposedly bring the messiah.) The company then purchased a nearly 43% stake in El Al, taking over from the previous majority stakeholder Knafaim Holdings.
As for where a young religious studies student might get the means to set up a multi-million-dollar holding company, one can only wonder if the funds were from Dad – though The Jerusalem Post notes “father Kenny Rozenberg is said to be behind the purchase.”
Either way, the deal is still awaiting approval from the country’s finance committee, but Eli Rozenberg is expected to meet with the Finance Ministry next week.
According to Globes, he wants to make changes to El Al’s board and invest heavily in improving El Al’s service, especially the onboard food service and operate on-time flights.
But turning around the airline could prove to be even more difficult than it sounds. For one, El Al’s flagship U.S. routes have seen an incredible amount of new competition during the carrier’s shutdown. American, Delta and United have all used the shutdown as a time to announce and further strengthen their hold on the U.S. to Israel market.
American announced new routes to Israel from Dallas and New York-JFK, Delta is going double-daily on its JFK to Tel Aviv route — including one frequency operated with new Delta One Suites — and United will offer a whopping 23 weekly flights to Israel from its various U.S. hubs.
Increased competition isn’t just limited to El Al’s U.S. routes. European low-cost carriers have flooded the Tel Aviv market in recent years too.
Either way, the Rozenberg ownership marks a new chapter for the Israeli flag carrier. Only time will tell if the Rozenbergs become El Al’s messiah — just as the name of their new holding company implies.
Featured photo by Fabrizio Gandolfo/SOPA Images/LightRocket via Getty Images
Welcome to The Points Guy!
WELCOME OFFER: 80,000 Points
TPG'S BONUS VALUATION*: $1,650
CARD HIGHLIGHTS: 2X points on all travel and dining, points transferrable to over a dozen travel partners
*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.
- Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,000 when you redeem through Chase Ultimate Rewards®. Plus earn up to $50 in statement credits towards grocery store purchases within your first year of account opening.
- Earn 2X points on dining including eligible delivery services, takeout and dining out and travel. Plus, earn 1 point per dollar spent on all other purchases.
- Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards®. For example, 80,000 points are worth $1,000 toward travel.
- With Pay Yourself Back℠, your points are worth 25% more during the current offer when you redeem them for statement credits against existing purchases in select, rotating categories.
- Get unlimited deliveries with a $0 delivery fee and reduced service fees on eligible orders over $12 for a minimum of one year with DashPass, DoorDash's subscription service. Activate by 12/31/21.
- Count on Trip Cancellation/Interruption Insurance, Auto Rental Collision Damage Waiver, Lost Luggage Insurance and more.
- Get up to $60 back on an eligible Peloton Digital or All-Access Membership through 12/31/2021, and get full access to their workout library through the Peloton app, including cardio, running, strength, yoga, and more. Take classes using a phone, tablet, or TV. No fitness equipment is required.