El Al Israel Airlines Ltd. reported to the Tel Aviv Stock Exchange that the company is negotiating a possible takeover of Tel Aviv-based Israir and could absorb the airline’s assets into either its charter or low-cost divisions.

The company said it "is examining the possibilities of initiating and developing operations through cooperation with enterprises in the aviation and tourism industry, including by establishing an independent wholesale tourism body, merging with a tourism company or buying an existing tourism/wholesale company, and this includes talks with IDB Tourism regarding an arrangement with Israir."

The Israeli carrier also makes it clear that it is talking about a possible deal between Sun D'Or and Israir Airlines and Tourism Ltd., and the parties have decided to, "deepen examinations and only after this would the sides make a decision on how to proceed."

Sun D’Or is active in charter flights, leasing an airplanes’ seating capacity at prices agreed in advance, selling seat packages to agents, and to the general public. Israir’s fleet comprises two Airbus A320s and two ATR 72s. Though not a natural fit for El Al’s low-cost brand Up – which deploys four Boeing 737-800s – a merger could unlock cheaper labour costs at the low-cost division. El Al informed that no Memorandum of Understanding (MoU) has yet been signed on the matter.