In a recent op-ed published in The Marker, Professor Nitzan Shilon examines the request by El Al, Israel’s national airline, for state indemnification to cover recent losses. Shilon challenges the "National Responsibility" narrative, arguing that the company's decision to maintain operations—while appearing loss-making in the short term—is actually a calculated move to protect long-term reputation, consumer loyalty, and share price, all of which determine the compensation of its top management.
The piece highlights a "Double Dip" concern: throughout most of the post-October 7 war, El Al took advantage of foreign competitors exiting the market to charge monopolistic prices, resulting in a historic $541 million profit in 2024. Now that opening a front with Iran has imposed more onerous aviation restrictions, the airline is attempting to cynically shift the resulting temporary losses to the public. Shilon argues that continuing services in this environment is not altruism, but a strategy to maximize executive compensation, which is tied to long-term performance metrics. Consequently, he concludes that the public should not be asked to subsidize decisions that ultimately serve private managerial incentives. The piece contributes to the global discourse on corporate governance, corporate nationalism, and the interaction between corporations and states during national crises.
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