Diplomacy Opens New Era for Israel’s El Al Airline

Israel’s widening diplomatic ties are clearing the skies for El Al Airlines.

The national carrier, which last year opened routes to the former Soviet Union, now is looking farther east. It will begin nonstop service on Sept. 3 to Beijing, its first destination in the Orient.

The new route is a big step for a small company that a decade ago was grounded and on the verge of bankruptcy. But it’s also a measure of how far El Al has come toward recovery despite its still-heavy debt burden.

Last year, El Al benefited when most airlines cut off Middle East routes and incurred heavy losses during the Persian Gulf War. In early 1991, it had almost 100% of the traffic at Ben-Gurion Airport near Tel Aviv, double its usual share.

El Al carried a near-record 1.75 million people in 1991 and still managed to shift some idle passenger jets to cargo routes.

The result was a record $39 million in earnings last year, its sixth consecutive annual profit.

Company spokesman Nachman Klieman said it’s natural for El Al to look east for growth since relations were established this year with China and India. El Al cashed in on Israeli diplomacy last year after ties were re-established with Moscow.

“After expanding into Eastern Europe and the independent republics (of the former Soviet Union), we feel the East provides the greatest potential for traffic and tourism,” Klieman said in a recent interview.

Israeli travel agents agree.

“It’s a big breakthrough for El Al,” said Mosh Savir, general manager of Geographical Tours in Tel Aviv. “There’s a potential to double, triple tourism to China.”

The government-owned El Al, which is Hebrew for “to the skies,” has come a long way since its modest--if unorthodox--start.

Israel’s fledgling air force was given the job of bringing back President Chaim Weizmann from a trip to Geneva in 1948 when the country was a few months old. Since it could not land a military plane at a civilian airport, the air force improvised.

A military transport was fitted with a sofa and refrigerator, and the plane was given a coat of paint, an El Al logo and a Star of David on its tail.

A year later, the airline’s blue-and-white passenger planes began regular service to Paris and Rome.

Travelers have a love-hate relationship with El Al because of its idiosyncrasies.

Its much-vaunted security checks can take hours. It doesn’t fly on Saturday, the Jewish Sabbath. Some first-time passengers are taken aback by Orthodox Jews in black hats standing in the aisles for in-flight prayers.

Secular Israelis complain the all-kosher food is not up to that of European competitors. But it still isn’t kosher enough for some religious Jews, who bring bag lunches aboard.

An attempt to satisfy the secular by serving imitation shrimp angered the Orthodox, who complained even fake non-kosher food was an affront.

Profits in the early years were buoyed by a unique El Al responsibility that continues today: In addition to fare-paying passengers, the airline is paid by the quasi-government Jewish Agency to transport Jewish immigrants from abroad.

But things went sour in the 1980s. High fuel costs and labor disputes led to a record loss of $140 million in 1982 and a government-ordered shutdown for four months while the near-bankrupt airline was reorganized.

Although El Al still carries about $200 million in debt--and the government had to guarantee its latest purchase of two Boeing jets--the company’s balance sheet continues to improve.