Bank Hapoalim is in talks about the purchase of a 30% stake in the frequent flyer club Matmid from El Al Israel Airlines Ltd. The negotiations follow demands from the Treasury Department that El Al should sell 30% of the shares in his loyalty club as part of the company’s rescue package, Trend reports, citing Globes.
The Matmid Frequent Flyer Club is valued at $ 250 million, up from $ 300 million prior to the Covid pandemic. When El Al was negotiating loans with the banks last year that she eventually failed to take out, the frequent flyer club had been offered as collateral.
The talks with Bank Hapoalim are taking place with the participation of the Ministry of Finance. Bank Hapoalim’s goal is to combine the activities of the Frequent Flyer Club, El Al’s most profitable activity, with their payment app Bit so that users, possibly the younger customers, can collect points.
El Al’s frequent flyer club has 2.1 million members, 350,000 of whom have the FlyCard credit card. The club has annual profits of $ 20-25 million and FlyCard cardholders spend an estimated $ 30 billion annually.
In late 2018, El Al decided to continue operating FlyCard through the CAL credit card company after a protracted battle in which LeumiCard had hoped to win the coveted credit card. The agreement between El Al and CAL, which gives them the sole right to issue FlyCards, is valid until 2029. As part of the agreement, El Al received a signing fee of NIS 125 million and continues to benefit from royalties and currency conversion income.
Bank Hapoalim said: “We do not comment on any matters relating to business negotiations.
El Al declined to comment.