IDB Development, the indebted holding group that owns Israir (6H, Tel Aviv Ben Gurion), is hunting for investments to keep it and the airline afloat. Well-known discount-supermarket mogul Rami Levy submitted, together with businessmen Shalom and Dror Haim, a ILS70 million shekel (USD20.5 million) bid to buy the carrier on October 4.

Much like Eli Rosenberg - who on October 3 received Government Companies Authority permission to take control of El Al Israel Airlines - Levy has no prior connections with the airline industry.

Levy and the Haim brothers submitted the bid through their company BGI Investments and also offered to take care of a USD5 million loan Israir has with IDB Development.

Despite their interests being rooted in very different economic sectors, the two companies have cooperated in the past in marketing Israir routes to Baku and Tirana, the newspaper Haaretz reported, and both are low-cost competitors to leading rivals. Israir has even been known to refer to itself as “the Rami Levy of the airline industry.”

But the bid is unlikely to be accepted, sources told Haaretz, as it is fairly low. IDB bondholders, who won control of the holding company last week as a court-appointed trustee to manage an asset selloff, may instead wait for the coronavirus lockdown to pass before conducting a reassessment of the carrier’s prospects.

The bondholders are also reportedly unhappy that the bid fails to include a timetable of future investments that take into account the airline’s growing valuation as it recovers from the travel restrictions. BGI may now react by upping the price, or by adding convertible bonds to the package, the sources predicted.

However, on October 6, the Israeli business daily Calcalist exclusively reported that senior officials at rival carrier Arkia Israeli Airlines (IZ, Tel Aviv Ben Gurion) had offered IDB’s creditors a merger with Israir. According to them, the merged company would reach a value of ILS300 million (USD88 million) to ILS400 million (USD117.5 million).

It is not the first time Arkia has made such a suggestion. In April, at the height of the lockdown, Avi Hurmero, Arkia’s then-chairman, commented to Israel’s PassportNews: “If they don't merge the three companies Arkia, El Al, and Israir, nobody will survive.”

But bondholders may not want to endure a lengthy merger process, which could take more than half a year and would require the approval of the Israel Competition Authority, according to Calcalist. In 2017, the authority prevented a merger between El Al's Sun d'Or International Airlines (2U, Tel Aviv Ben Gurion) and Israir citing concerns about a resulting lack of competition in the Tel Aviv-Eilat market.