El Al in the Dumps as CEO Departs

YERUSHALAYIM -
El Al
David Maimon, outgoing Chief Executive Officer of El Al Airlines at a welcoming ceremony for a new Boeing 787 Dreamliner at Ben Gurion International Airport, on August 23, 2017. (Tomer Neuberg/Flash90)

After two-and-a-half years as CEO of El Al Airlines, David Maimon announced his departure on Thursday, and Israel’s flagship carrier is looking for a new CEO and a new sense of direction as well.

In his letter of resignation, Maimon listed some of his accomplishments: “buying new planes, expanding the network of routes, launching the Fly Card credit card, and expanding foreign aviation activity (including ground services), with an emphasis on streamlining…”

However, as Globes reported, he does not leave the company in a strong position. El Al’s share price dropped through the bottom, 52 percent, in 2017; and there were protracted and damaging labor disputes with pilots and ground personnel.

The acquisition of 16 Dreamliners are viewed by some as a mixed blessing; an impressive fleet, but also an impressive challenge to make those huge crafts pay back on their investment. Increased competition will make it hard to fill the big planes with passengers. For example, the route to Hong Kong, formerly El Al’s exclusive province, now has serious competition.

A travel agent in Israel was quoted as saying that the airline has fallen behind in marketing. “In addition, airlines are also strengthening their direct sales through giant companies Expedia and Priceline, and El Al simply isn’t there. The company needs a CEO who knows how to read the map and invest in the right marketing instruments,” he said.

Maimon’s successor hasn’t been chosen yet. In the running: Israir CEO Uri Sirkis, El Al’s own VP commercial and aviation relations Gonen Usishkin, Yehudit Grisaro, currently VP of human resources and administration.

From the military, two former air force generals have been mentioned as possible candidates: Major General (res.) Ido Nehoshtan and outgoing Major General (res.) Amir Eshel.

The question of who will take over from Maimon points up another weakness in the management of El Al, according to a senior industry source:

“Although it has not officially declared, CEOs at El Al have recently been serving for 3-4 years. This is a terrible management mistake that is not common in the industry, where many CEOs serve for many years (examples include United Airlines, British Airways, and also Israir). The processes in the industry are long-term, and replacement after time intervals like these at a such an unstable time in the industry is likely to be reflected in business results, as we will probably see in the upcoming reports,” the source said.