El Al also today updates on the impact of the Corona virus on the company’s operations, and on the need to make adjustments to the activity in order to cope with the decline in activity and revenue. The company continues to monitor developments in the country and around the world, the decisions of the government and the decline in demand.
El Al has updated its estimates of the impact of the event on its financial results in light of the decline in activity in Italy and Japan, as well as the Ministry of Health’s recommendation regarding flights to all world destinations. The Company’s assessments have not yet been taken into account of the implications of the Ministry of Health’s guidelines issued on March 4, 2020, regarding the requirement for isolation for returning passengers and prohibiting entry of foreign nationals from other countries – France, Germany, Switzerland, Spain and Austria.
The company expects revenues to fall in the range of $ 140 to $ 160 million, from January to April 2020 (including), of which $ 80 to $ 90 million for the first quarter of 2020. In the Company’s estimation, the decline is expected to offset in part with the company’s operating expenses reduced .
Accordingly, at this stage, the Company estimates that the impact of such decline on the Company’s results for the months of January to April 2020 (inclusive) is expected to be in the range of $ 70 to $ 90 million, of which $ 35 to $ 45 million for the first quarter of 2020.
In light of the expected losses, El Al is making significant adjustments to its operations and the network of networks in accordance with the decisions of the government and in accordance with the decline in demand. In addition, the Company carries out operational and financial operations aimed at reducing its expenses and reducing the decrease in cash flow.
As El Al reported last week, about a thousand employees will be laid off and the remaining workers’ wages will be reduced. The salary of members of the Board of Directors and members of El Al’s management will also be cut by 20%.
El Al contacted the Ministry of Finance for support from the State of Israel and held talks with him on the matter. In its announcement to the Stock Exchange, the company makes it clear that this is a variable event that is not under its control and factors such as the continued spread or arrest of the virus, decisions by relevant countries and authorities in the country and around the world to stop or resume flights to different destinations or to set guidelines regarding different destinations or changes in demand may affect the company. .
Due to the rapid pace of development of the Ministry of Health’s decisions and government officials in Israel and around the world, the company will continue to monitor developments regularly and update its forecasts accordingly.
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