Israeli flag-carrier El Al has warned that the survival of the airline is uncertain as it seeks to secure urgent funding to cope with the coronavirus crisis.
In its belated full-year financial statement, El Al says a loan is “essential” and that the are “significant doubts” about the continued existence of the company as a going concern.
El Al’s auditor has similarly drawn attention to the uncertainty over the airline’s financial position.
Deloitte states that the collapse of demand and disruption caused by the coronavirus outbreak has prompted El Al to adjust its cash outflow and negotiate with lenders over a loan of around $400 million.
“Negotiations with the state and lender are continuing and uncertainty exists regarding completion,” it adds in a ‘going concern’ note.
The airline points out that among the problems it is facing is a decline in aircraft values, which are normally used to secure loans for the company’s activity.
El Al is pushing back the release of its first-quarter results, aiming to publish them by 30 June.
For the full year 2019 it turned in a net loss of $59.6 million, deeper than the previous year’s $52.2 million.
The airline’s pre-tax loss was also higher, at $76.6 million. Revenues edged upwards by 2% to $2.18 billion while expenditure was down slightly to $1.83 billion.
El Al’s current liabilities at the end of last year stood at $1.08 billion compared with current assets of $486 million. Its non-current liabilities amounted to $2.24 billion against non-current assets of just over $3 billion.
