A 20-Year-Old Is Negotiating To Buy EL AL

Filed Under: El Al

EL AL has been looking for a new investor for the past several months. The airline was in a bad financial situation before the current pandemic started, and of course this situation just exacerbated EL AL’s problems.

20-year-old revealed as EL AL bidder

A couple of weeks ago it was revealed that an unnamed party was interested in acquiring EL AL. Many people were curious who was behind this, and now we know, per Calcalist.

A 20-year-old named Eli Rosenberg, who currently lives in Jerusalem, is negotiating to take a controlling stake in EL AL. As you’d expect, there’s a backstory here.

Eli’s father is Naftali Rosenberg, a New York businessman who owns nursing homes, private ambulance companies, and more. Eli has Israeli citizenship, which is a requirement of taking a controlling stake in the airline. His father, on the other hand, doesn’t have Israeli citizenship.

At this point the takeover is only in the early stages, and the Rosenbergs are allegedly in negotiations with the Borowitz family, as they’ve had a controlling stake in EL AL since 2003.

Frankly one has to wonder what private investor would want to take a stake in EL AL at this point. The airline has a lot of labor issues, and even in the best of times the airline struggled to be profitable. Short of national pride or some other play, I just can’t make sense of this.

A 20-year-old could be the new owner of EL AL

Israel may otherwise nationalize EL AL

It’s worth noting that in the event that EL AL isn’t able to find a private buyer, Israel’s government is intending to nationalize EL AL. The country doesn’t intend to keep a stake in the airline long term, but rather only as long as is needed to get the airline back on its feet.

Israel’s Transportation Minister said that the government would be willing to help the airline “as long as needed to maintain Israel’s aviation independence.” The government’s takeover plan would be contingent upon approximately one third of employees being made redundant.

This plan would see the government investing up to $400 million in the airline, including providing a $250 million loan, and also purchasing $150 million in common stock, which would give the government a 61% stake in the airline.

EL AL’s 777 first class

Bottom line

While it’s far from a sure bet at this point, it’s funny to think that a 20-year-old could potentially be the majority shareholder of a national airline. Only time will tell how this situation unfolds — the hope is that EL AL can find a private investor, but if not, the Israeli government has pledged its support.

(Tip of the hat to Alon)

Comments
  1. What business-oriented family (aside from the Korean chaebols) would waste capital on the controlling stake of a less-than-financially robust airline? I suspect they’re in it for political reasons.

  2. I wish all the best to El Al and Israel.

    We have had 2 phenomenal visits to Israel and look forward to visiting again!!

    While we didn’t fly El Al, we took Delta and Alitalia and both were pleasant flights.

  3. “Short of national pride or some other play, I just can’t make sense of this.” –> It’s likely exact that. Some combination of national and religious pride. I’m guessing he also thinks he can make some money though without any prior experience in the industry that might be tough

  4. @Al yes – and also the fact that the Israeli government will NEVER let this airline collapse. The country needs its independent airline for security reasons.

  5. If United was able to make Israel so profitable there is no reason to think that Israel’s own airline cannot. Without the horrible management, they may actually be able to turn things around.

  6. People here obviously knows nothing about restructuring or making money from controlling interests.

    If I had the money and not being discriminated against by citizenship, I would consider El Al bid.

    Like what you do know, the government will always need a undercover Mossad plane.

  7. @ Eskimo
    I kind of agree with you. Almost any deal can make money depending on the terms.

    Discrimination is too strong a term. Almost every Country, including the USA has terms requiring ownership by citizens.

  8. Jewish family run nursing home and ambulance … well, that is a business too familiar to me as I am living in a Jewish neighborhood. This business is very profitably for a simple reason, they mostly take money from government instead of private consumers. Now think about airlines… I am pretty sure this family is not in it to loose money, trust me

  9. “it’s funny to think that a 20-year-old could potentially be the majority shareholder of a national airline.”

    A very interesting proxy for his dad, I guess.

  10. “A 30-year-old named @Benjamin Schlappig, who currently lives in Miami, is negotiating to take a controlling stake in EL AL. As you’d expect, he intends to install OMAAT reader @Sean M as CEO of the restructured airline.”

  11. If the guy has political ambitions in Israel, owning a sizable chunk of the flag carrier gets him instant status as a power to be reckoned with.

  12. @ Lu

    Please don’t invoke tropes often seeded in antisemitism (Jews money, government, etc). They may not be motivated by earning the highest return on their investment but rather to improve a vital connection linking diaspora Jewry globally.

  13. This shows exactly why we need a 100% inheritance tax to level the playing field. A 20-year-old nobody without any actual work experience should never have hundreds of millions dollar to buy a whole company!

  14. That El Al exists is a national imperative. In previous defensive wars that Israel has had to fight for survival (1967 and 1973) every international airline ceased flying to Israel for several weeks. Only El Al kept flying to allow ex-pat Israelis to return home and essential cargo (including urgently needed medical supplies) to enter the country.

  15. @Kieran
    In my opinion the first part of your post reeks of an attitude against Jews. Nice to see it exposed.

    As pertains to the rant against the airline, that might be how it is. There are many lousy airlines out there, nobody is forcing you to fly them.

  16. “one has to wonder what private investor would want to take a stake in EL AL at this point”

    …”owner of airline” looks good on a resume.

  17. @ Max – Regarding an inheritance tax: I totally disagree. The person who earned the money throughout his/her lifetime paid the taxes on it already. NO inheritance tax would be much fairer!

  18. El Al is an albatross on the back of the Israeli traveling public. Politically protected and designed to serve its labor unions more than passengers. Let it fold and allow the private sector to find private investors to compete for passengers and let the market determine the winners.

    Almost every aspect of the Israeli economy has been freed from the greedy labor unions, and allowed Israel to become the vibrant and prosperous economy it is today. There is no reason this can’t work for aviation as well.

  19. HI Sharon
    I was on a new very QUIET El Al 787-9 last year and slept 5+hours in economy.
    On my prior trip there was great comfort stretching out on a lie flat bed in biz class on Swiss, but the airbus was quite noisy and I had little sleep.
    (Check youtube videos for “relaxing walker” who has recorded visits to several Israeli cities and towns.)
    Josh -toda rabah for your comment!

  20. IMHO, the issue is not making El Al profitable; it is making El Al profitable AND having to bow down to the entire Ultra Orthodox community, who are DYKWIAs, as many stories on OMAAT, FlyerTalk and other boards will attest.

    (And before any of you say anything, I belong to a Conservative Temple.)

  21. These guys know $$. El Al may be one dry turnip but I have a difficult time believing there won’t be at least some cash to drip out when all is said and done.

  22. Perhaps the play here is to tie the airline into when folks pass away in the US, they can offer to send them to Israel to be buried. Apparently, there were charter planes during Covid doing just this… maybe it become a bigger source of revenue if advertised directly into the nursing/hospice homes.

  23. @GSBEWR
    Just because you belong to a conservative temple does not give you the right to be antisemitic to Ultra Orthodox Jews. In fact the hatred to the orthodox communities from the conservative and reform is just as bad, if not even worse as then people think its credible as you are Jewish too. Please let us all stick together and no need to bash any form of life.

    @Max
    If you made a lot of money, you don’t think its fair for your children to receive it? The fact that a 100% inheritance tax can be suggested, it is just jealousy.
    And no, I was not born with a silver spoon in my mouth, nor born to any riches. Yet, if I make it big one day, to say I can’t share that with my family is ridiculous.

  24. @GSBEWR

    Wow. You just systemically profiled an entire religious community.. 2nd – you being conservative does not give you the right to hate the orthodox community. There are always some bad apples. Please judge everyone favorably and don’t profile an entire community into the select few of people that you read about online and possibly have met. Thanks

  25. @Mike
    Some money? Yes. Millions of Dollars? Heck, NO!

    A lot of money means a lot of power. A person who has never worked in his life, getting that money via inheritance has no right to hold that kind power and also lacks the necessary experience and responsibility.

    I’m fine with people inheriting a house, a car, some money to cover living expenses, valuable family contacts, a good family name…
    But I’m not fine with inheriting power in the way it happened during royal times.
    Capitalism only works if you have a level playing field. Unfortunately in the US you are getting more and more monopolies/oligopolies.

  26. Why isn’t there a Palestine Airways ?

    Maybe it’s because they don’t have a single contiguous strip of land large enough for a runway these days ?

  27. @Josh G – seems your comment got deleted. Maybe you need to read the Balfour Declaration and brush up on your history a little 😉

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