Knafaim opts for 23% of El Al

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Israeli budget carrier Arkia?s parent company is to exercise options for 23% of El Al, the country?s dominant airline

Arkia Israeli Airlines parent company Knafaim Arkia Holdings is set to increase its stake in rival Israeli carrier El Al. The company, which purchased options for 51% of El Al stock when the government sold its share in the airline last June, is to exercise options for 23% of the company.

The Jerusalem Report claimed that Knafaim is keen to exercise more of its options in El Al but is awaiting clearance from monopoly regulators. The interest has been spurred by a turnaround in El Al's fortunes, posting a first-quarter profit of $4.5 million compared to a $33.5m loss during the same period last year.

The report also suggested that Knafaim was keen to sell Arkia's international flights and domestic operations to low-cost carrier Israir, which operates charter flights to Europe and is shortly to begin direct services to the US. But a Knafaim executive dismissed the suggestion as ?speculative at best?.