Israel airline strike ends after government, El Al forge deal

Mon Apr 22, 2013 2:03pm EDT
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By Steven Scheer

JERUSALEM (Reuters) - Israel reached an agreement with airline El Al (ELAL.TA: Quote) on Monday to help cover its security costs, which ended a two-day strike and will help the flag carrier be competitive in an open-skies deal with Europe.

Flights at El Al and two smaller airlines were grounded for a second day as workers protested against the open-skies deal with Europe, which was approved by the cabinet on Sunday and which they feared could cost them their jobs.

Nearly 50 El Al flights from Tel Aviv were canceled on Monday, affecting some 15,000 passengers, although the airline's union did allow three special flights to take off.

An El Al spokeswoman said flights would resume at 23:30 local time (2030 GMT).

Since the start of talks on the open-skies deal three years ago, Israeli carriers and their workers' unions have been concerned about the steep security costs Israeli airlines must pay, which their competitors overseas do not.

The government currently pays 70 percent of Israeli airlines' security costs and had agreed to raise it to 80 percent, but the airline did not deem that enough. El Al itself paid $33 million for security in 2012.

The Finance Ministry said it had reached an agreement on security issues with El Al but did not provide details. The Histadrut, Israel's main labour federation, said the state would finance 97.5 percent of Israeli airlines' security costs.

"Too bad it took two days of strike and damage to hundreds of thousands of citizens to reach an agreement that could have been done last Friday," the Histadrut said.   Continued...