JERUSALEM The chief executive officer of El Al Israel Airlines (ELAL.TA), Elyezer Shkedy, tendered his resignation on Sunday and will step down after his successor is in place, the company said in a statement.
Shkedy, a former Israeli air force chief, has led the national carrier for four years.
El Al quoted Shkedy as saying he felt "pride and tremendous satisfaction" about his role at the airline, but regretted failing to put together a new collective labor agreement for staff.
"El Al must reduce spending for the sake of a better future for its personnel and passengers, if it wishes to continue to grow and compete in the field of aviation, which is variable and challenging," Shkedy said in the statement.
The FIMI fund, Israel's largest private investment fund, had agreed in April to inject up to $75 million in El Al but the deal was contingent on El Al reaching a new collective labor agreement aimed at allowing the carrier to deal with an increasingly competitive environment.
FIMI, which was to receive 47 percent of El Al, in October called off the agreement after a new labor contract could not be reached.
El Al posted a 54 percent rise in third-quarter net profit on November 13, boosted by higher revenue and efficiency measures as the company continued to cut its workforce.
At the time, Shkedy said the company faced increased competition in the quarter as foreign airlines increased the number of seats offered by 14 percent.
He cited Turkish airlines which, he said, had stepped up flights to and from Israel while its own carriers were prevented from flying to Turkey.
With an open skies deal with the European Union set to start taking effect next April, El Al launched a low-cost brand called UP that will initially will fly to five destinations in Europe in an attempt to stay competitive.
Shkedy had been critical of the open skies deal, which he at first called unfair since El Al's security costs were far higher than European carriers. After a strike that grounded flights in April for two days, Israel's government agreed to pay 97.5 percent of El Al's security costs, up from 70 percent.
El Al's shares were up 1.6 percent in morning trade in Tel Aviv.
(Writing by Dan Williams; Editing by Andrew Roche and Steven Scheer)