El Al Israel Airlines Ltd. said last Sunday that the Israeli government has agreed to raise the amount it pays for the airline security costs.
According to the company's press release the agreement covers the continued provision of security services by El Al to Israeli airlines, and a gradual increase in the government's participation in the security costs for Israeli airlines, including El Al.
El Al's current security costs are about NIS 120 million annually.
The press release noted that the state had been paying 60% of the airline's security-related expenses but that figure will rise to 65% for 2011 and 70% for 2012, 75% when the open skies agreement with the EU is signed, and 80% when the open skies agreement comes into effect.
In a statement to the Tel Aviv Stock Exchange El Al noted it expects its 2011 expenses to be reduced by US$5.8 million in 2011.
The agreement which was signed last August with the Finance Ministry and was subject to government approval is seen as a success among Israeli airlines.
El Al CEO Eliezer Shkedy said that the agreement was "fair" and enables the airline to compete against foreign airlines that did not have to shoulder the same security costs as El Al.
