| Magazine Feature |

Waiting in the Wings

Why are Orthodox tycoons battling to take over El Al?

Drive along Israel’s Route 1 past Ben Gurion Airport today, and you’ll see the aviation equivalent of a cup that’s half full and half empty.

Gleaming there in the hot sun, behind the concrete and wire barriers that ring the runway, are serried ranks of neatly-parked planes with crisp blue-and-white livery. Like freshly-minted air cadets standing at attention, it looks like the entire El Al fleet is there, grounded due to coronavirus and the financial storm into which the company has been thrown.

It’s a sight that must give Prime Minister Bibi Netanyahu heartburn, as he whisks past in his motorcade on the way to the nearby Defense Ministry, aware that Israel’s flagship carrier is on life-support and will expire without a $400 million cash transfusion.

But whereas the masses of Israelis making the daily Jerusalem-Tel Aviv commute see the silent airliners as a catastrophe, in more than one boardroom in the New York area, those same planes are generating excitement as the next big business horizon.

Over the last few weeks, a fascinating race has opened up, as first one, then another, Orthodox tycoon has thrown his hat into the ring to bid for El Al, the Israeli icon that’s fallen on hard times.

First was Monsey-based Kenny Rozenberg, long-time Hatzolah volunteer and boss of Centers Health Care, a nationwide chain of nursing homes. Then came Israeli-born Meir Gurvitz, who went to England as a teenager to learn in Gateshead Yeshiva, and then made a fortune in London’s real-estate market. And now there are reports in the Israeli business community of a third group of religious investors from the New York area.

“Why would a businessman make an offer for such a problematic company as is, without real proper knowledge of the company? It’s weird,” says a secular Israeli journalist, speaking off-the-record and representing a wider public both intrigued and suspicious of a Sabra symbol being sold to a man whose son learns in yeshivah in Jerusalem. “There are famous Israeli businessmen who were pilots themselves and have a sentimental connection to the company, but even they haven’t touched it.”

So what indeed is bringing these businesspeople to an ailing company, which has held its own distinguished place in Israel’s culture and Shabbos wars?

“Kenny needs challenges, he thrives on that sort of thing,” says a friend of Rozenberg, “and it was either buying and rebuilding a sports team or doing this, helping Eretz Yisrael and its economy. I hope he gets it. Im yirtzeh Hashem, it will be good.”

But according to Ori Keidar, an Israeli lawyer who uses his extensive knowledge of Israel’s business scene to represents high-net-worth individuals and NGO’s in the New York Orthodox community, there’s more to the latest round of bidding than a simple financial challenge.

“With the opening of the Gulf, there are investors who now feel that there is a big opportunity to turn Israel into a regional transport hub and expand the business significantly,” he says.

If Ben Gurion Airport’s runways, which currently face west across the Mediterranean to freedom and away from the constriction of the Arab boycotts, find themselves processing traffic to the Gulf, the future owners of El Al could be sitting on a goldmine.

But as the race for El Al heats up, the questions about Orthodox ownership of a company this significant are many. How can they operate profitably without flying on Shabbos? Will BDS cripple an international expansion? And can Israel stomach a national icon going to visibly religious investors?


Airborne Assets

“I would describe Kenny in this way,” says a Monsey storeowner who’s friends with Rozenberg. “He’s a Hatzolah guy with every fiber of his being, but without the lights and sirens.”

The media spotlight now focused on him is about as foreign to Kenny (Naftali) Rozenberg as the airline business he’s bidding for, but people who’ve known him for a long time weren’t surprised when news surfaced that he was a leading bidder for the purchase of El Al. That’s because he’s known for his ability to see opportunities that others miss.

His first business break came in the mid-1990’s, when he was working as administrator of a small Bronx nursing home, and there was a chance to buy a similar facility. He jumped in, and since that time, the core business kept expanding. But somehow, Rozenberg himself never really changed.

The employees who were with him then feel like they’re part of the family, encouraged to grow along with the mounting network of nursing homes, rehabilitation centers, assisted living facilities, and specialized care centers. The business continued to grow, with investments not just in related fields, but also in real estate and even Israeli wineries.

The family atmosphere among the senior staff means that they’ve often gone on joint trips, usually to Eretz Yisrael, where Rozenberg and his associates visit gedolim and holy sites together. It means that there’s a social bond between the employee families that goes beyond office hours. And it means that when the families need help, Kenny is there too, as one long-time employee found out when his grandson struggled to make it in yeshivah and fell out of the system.

He mentioned it to his boss in passing, and the next day, Rozenberg called to invite the young man to train in as an ambulance driver for Centers Health Care, welcoming him to the family.

Rozenberg himself, president of a national health care empire, drives a Chevy Suburban, indicative not just of modesty, but also of his passion.

Saving lives.

He started out as part of Manhattan Hatzolah, continuing as a volunteer after moving to Monsey, and he considers it a zechus that he won’t give up. Even though he helps in so many other ways, as donor, advocate, and guide to younger members, he continues to take calls, often showing up at times that are inconvenient for others.

The months of COVID-19 were among the busiest periods the company ever faced, as it stood tall in its handling of the virus in its myriad facilities and centers, its health care professionals distinguishing themselves with their dedication.

It was during that time that Rozenberg realized that Israel’s national airline was in a tailspin and there was a chance to help — and add something original to his portfolio.

Kenny Rozenberg, a graduate of Yeshiva University, has always been close to rabbanim and mindful of their advice, but he was particularly close to Rav Aharon Leib Steinman, and is close to members of the Abuchatzeira dynasty, particularly Rav Pinchas of Beer Sheva. Rav Pinchas, a son of Rav Elazar Abuchatzeira who inherited his father’s mosdos and financial empire after Rav Elazar was murdered in 2011 by a disgruntled petitioner, keeps a low profile, but is a key advisor to an assortment of businessmen, many of whom were close to his father.

Some speculate that it was Rav Pinchas who suggested that Rozenberg make the bid for El Al; others put it down to his own thirst for a challenge and vision to help Eretz Yisrael and its economy.

Either way, it’s a similar question being asked about long-time London-resident Meir Gurvitz, who now lives in the US. Reportedly a qualified pilot, his business was always earth-bound real estate in London and beyond. His offer to buy between 25% and 40% of El Al stock competes with Rozenberg’s $75 million offer for a 45% share in the company.

But given the parlous state of Israel’s national carrier, is it even worth it?

Turbulence Ahead

As anyone who has flown El Al can attest, the pilots’ prodigious aviation skills aren’t always matched by eloquence. The often barely-decipherable, Hebrew-accented announcements — “This is your captain speaking, errr, we’ve reached cruising altitude, thank you for flying El Al” — are indicative of the aircrews’ position within El Al in general, and the problems at the company.

“This is a bastion of the Air Force, which is still mostly secular, and the pilots are a tight-knit elite,” says a US-based pilot who spent time at the company. “As Air Force vets they are very assertive and have a uniquely Israeli mentality. For example, there is a Boeing training manual which says you’re not allowed to go above a certain line on one gauge. In the US we understand that it means to stay below the line, but the Israeli pilots have a Gemara kop and say you can fly up to and including the line.”

But for Ori Keidar, the ingrained attitudes at the company are no laughing matter. “The biggest problem at El Al is that for decades, the company faced no competition. It was a government business, so Israel’s elite Air Force boys took over the company — it was a dream job.

“I have many clients in New York,” Keidar continues, “and so when someone contacted me and said, ‘What do you think about investing in El Al?’ I told them, ‘Are you crazy? There are powerful unions, Israel faces strategic risks and has big security expenses, and that’s in addition to the normal volatility of an aviation company.’”

And then there’s another issue: A national symbol important enough to be guaranteed by the state, many secular Israelis balk at the firm’s takeover by religious Jews.

“I speak for many Israelis who think that the government should buy El Al and not go for Rozenberg’s offer,” says the Israeli journalist. “Firstly, the offer is less generous than the government’s, and it’s also vaguer — is Kenny Rozenberg buying it, or his son, a young man who learns in kollel and lives in Ramat Eshkol?”

But pressed as to why these concerns — raised by the El Al board as well — make a difference, the source admitted that for many people the discomfort lies in the buyer’s religious identities and tropes about chareidi malfeasance.

“The timing is bad for the Orthodox here, because many people are suspicious of chareidim, claiming they failed to listen to coronavirus instructions,” says the journalist. “And why are the only buyers religious people? They must have a religious reason for wanting to take on a problematic company — maybe their rav told them to.”

Soaring Prospects

If El Al is indeed a potential frontline in Israel’s culture wars, why would these savvy investors need that problem?

“I have many Orthodox investors from the US who do wonderful business there but like to invest here, even if it means lower profits,” says Ori Keidar. “Their kids go to yeshivah here, they make aliyah, and some like a business base in Israel. And the bigger you are the bigger the base you need. For all those people, El Al is like buying the Crown Jewels.”

That was the story until last week. But according to Keidar, dramatic new horizons of business opportunity opened with the new three-way agreement between the US, Israel, and United Arab Emirates.

“The government has a plan to turn Israel into a regional transport hub, and it might be possible to compete with Turkish Airlines or others who fly to and from other regional destinations,” he says. “The idea is that El Al will expand beyond the core Jewish and Israeli business, to fly between two non-Israeli destinations. Or let’s say someone is flying from Paris to Hong Kong — it might be cheaper to stop in Ramon Airport near Eilat than in Dubai. That way El Al turns into something bigger.”

Israir, a smaller Israeli airline, has already taken steps down that geopolitical path to profit. According to Israel’s Channel 13, Khalaf Ahmad Al Habtoor, a billionaire Emirati real estate tycoon, confirmed his company was in talks with the Israeli airline about flights between the two countries. According to other reports, Israel was negotiating overflight rights with Saudi Arabia in order to access UAE airspace, effectively ending the Arab air embargo that has existed since 1948.

But this isn’t the only avenue for profit within the company. Compared to a lean US airline, El Al has multiple the number of staff needed, says the former pilot. And as a virtual monopoly with big brand recognition, there are multiple synergies with the core business — for example, in tourism.

“El Al now has lots of debt, but it can service that within five to seven years,” says Keidar. “Whoever comes out with lots of shares after this will make a lot of money.”

Gift of Shabbos

Any thoughts of turning El Al into a regional carrier inevitably raise the question of Shabbos. Both for Rozenberg, Gurvitz, and the third group of potential investors, El Al will fly less, not more on Shabbos. Whereas currently El Al subsidiary Sun d’Or flies on Shabbos, as does El Al’s cargo operations, that will come to an end.

The fact that that is an unprofitable business model, says the Israeli journalist, proves that it’s not about money for these investors. “The people around Rozenberg and Gurvitz say that they see this as a business venture, but maybe the business part is really not that important to them.”

But this is not the first time that the profit-Shabbos calculation for El Al has been on the table.

A WhatsApp clip that surfaces occasionally is of the famous “Shabbos speech” given by Menachem Begin in 1981, as his government battled to ground El Al — then a state firm — on Shabbos. Arms aloft, his voice electric, the prime minister raised in Brisk passionately declared to the Knesset:

“There was never a people like this in the world. Shoemakers, tailors, wagon drivers — each Jew was a king around his table with his children there for the Shabbat Queen. In Salonika the port was closed on Shabbat. And here in Israel, the blue-and-white El Al flag has been taking off and landing on Shabbat for 30 years?! More than the Jews have kept the Shabbat, the Shabbat has kept the Jews.”

And perhaps that’s the calculation of an expanding number of media-shy religious investors from the US.

Yes, there’s a business plan, with cost-cutting synergy and expansion across the Gulf. But ultimately it might be part of helping Eretz Yisrael and living on a higher plane.


(Originally featured in Mishpacha, Issue 824)

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