American Airlines management said that one of the reasons it decided to halt TWA flights from New York to Tel Aviv is its fear of having to pay high compensation to its employees in Israel.

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American Airlines announced it was examining Israeli labor law and TWA’s obligations to its employees if they are laid off. American Airlines reached the conclusion that if it continues operating the Tel Aviv line and later decides to halt flights for financial reasons, it would have to provide severance pay to TWA employees in Israel.

American Airlines claims the cost would amount to $9-18 million, which would represent an unacceptable risk for its management. American said that TWA had reported that the New York-Tel Aviv line lost money in each of the past two years. According to American Airlines, the high cost of the flights and the low ticket prices for the line have made it unprofitable. By contrast other TWA flights to and from Israel have operated at above-average capacity until recently.