For starters, EL AL already has the infrastructure for airline ops. They have the people with expertise, the facilities, the routes, the planes (even though id replace many of them), protocols, and their brand image (yes, their brand is worth something even though the company is struggling) etc. Just trying to form a competing airline to replicate the above would take a considerable amount of time and enormous expense.

The above is just a partial answer of why, on a practical level, creating a competing airline as oppose to taking over and/or reconstituting EL AL would be a much more difficult and financially costly endeavor.

Hotel to be built at Ben Gurion Airport
 

The IAA recently approved construction of a hotel to be built next to Terminal 3 at Ben Gurion Airport. The article can be found by clicking this link: http://www.ynetnews.com/articles/0,7...410718,00.html

My Note:

This is welcome news as such a hotel would facilitate the creation of a connecting traffic market at Ben Gurion Airport. Though we have discussed at length on this thread the feasibility of such a connecting market from the standpoint of EL AL specifically, little has been mentioned about such a market from the infrastructure standpoint that is external to EL AL.

The building of this hotel, and hopefully others to follow, coupled with revamping security protocols so that the procedure is less intrusive while retaining the current high level of security is necessary to create a viable connecting market. This requires EL AL and the IAA partner in making it happen.