El Al's Meteoric Rise: How the Rosenberg Family Turned a Pandemic Rescue Into a $1.5 Billion Fortune
Five years after Kenny Rosenberg rescued El Al from collapse during the pandemic, his family's investment has surged 6.6 times to $1.5 billion. Amid reduced foreign competition, the airline achieved a massive financial turnaround, though rising ticket prices spark consumer debates.
In September 2020, at the height of the COVID-19 crisis and when the global aviation industry was paralyzed, El Al was facing collapse. The company was drowning in deep debt and struggling with severe operational difficulties. Into this vacuum stepped the Rosenberg family. Kenny Rosenberg, through his son Eli, acquired controlling stakes in the company for approximately 360 million shekels.
Today, five years later, that investment is proving to be one of the most successful in the market. The Rosenberg family currently holds 42.25% of El Al shares, valued at approximately $1.5 billion. A recent analysis published in TheMarker reveals that after deducting a dividend of about $45 million received by the family in January, their net investment in the company stands at around $230 million. This represents an astronomical return of 6.6 times their money.
The meteoric rise in the company's value, currently estimated at about 10.6 billion shekels, has not gone unnoticed by the market. According to TheMarker's expose, financial entities and investment funds recently approached Rosenberg with an offer to realize profits and sell part of his shares, but he declined. People close to the family believe that the company's value still does not reflect its full growth potential, and that the stock, which has already surged by about 1,000% over the past five years, is expected to continue climbing.
Financial Gains and State Missed Opportunities
Alongside Rosenberg, the financial celebration is shared by other parties. Chairman of the Board Amikam Ben-Zvi signed an agreement granting him a share of the controlling partnership and enormous potential profit, as well as institutional bodies such as Clal Insurance and Phoenix, which harvested significant coupons on their investments. The party that missed out on the opportunity is none of other than the State of Israel, which bailed out El Al at the peak of the crisis and held 14% of its shares. The state rushed to liquidate its holdings too early; had it waited until today, the value of the shares would have brought about 1.5 billion shekels into the public coffers.
The financial takeoff is accompanied by a fundamental change in operations itself. A review by More Investment House, quoted in the report, shows that El Al has tripled its operations on transatlantic routes, which are considered the most profitable. Concurrently, the company completed a rare turnaround in its balance sheet: from a net debt position of $1.4 billion, it transitioned to a financial surplus of $900 million and accumulated a cash reserve of about $2 billion.
The Security Context and Consumer Impact
However, this business success cannot be detached from the security reality since October 7. The withdrawal of foreign airlines significantly reduced flight supply and market competition.
The reduction in flight supply also led to a significant increase in prices. The State Comptroller noted that due to excess demand, airline tickets were sold at prices significantly higher compared to the same period in the previous year.
The Israeli public flocks to El Al partly due to a sense of security, but a consumer absurdity has emerged: the aviation security apparatus is largely funded by state funds. This means the Israeli taxpayer subsidizes the most prominent competitive advantage of a private company, only to subsequently pay exorbitant prices for airline tickets.
Nevertheless, foreign airlines are signaling their gradual return, such as British Airways, which is expected to return soon. Within five years, the Rosenberg family's investment transformed from a risky gamble into a $1.5 billion asset. Now, El Al's real challenge will be to maintain its strength on the day after the war, when the skies reopen to competition and the Israeli consumer is no longer a captive audience.
