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“I assume all of you know Egged both on a national level and a personal level, but Egged is much more than that,” Egged CEO Gilad Riklin told the Globes Infrastructure for the Future Conference.
Riklin described how the company, which was founded in 1933, operated for more than 80 years as a monopoly. He said, “There were better times and less good times, but we were a monopoly and we received government subsidies.” In 2015 Egged underwent a process of change when the government decided to aggressively streamline and significantly cut the scale of costs in Egged.
Another government decision last decade was that Egged would need to change its cooperative structure to a business company structure and sell 50% of its shares to a private enterprise. Egged was even required to transfer some of its activities to external operators. “Think about how everyone who was a member of the association needed to prepare for a big change with a lot of competition,” Riklin said.
Riklin described the change that has taken place at Egged since then. “Regarding efficiency, the proportion of older and more expensive employees in the workforce has decreased from 63% in 2015 to 26% in 2024. During this period, more than 2,500 employees retired.”
In addition, the proportion of Egged’s electric buses increased during the same period from 2% of the bus fleet in 2021 to 24% in 2025. Riklin promised: “By the end of the year, we will have 1,104 electric buses, the largest fleet in the Middle East and Europe. In Dimona and Karmiel, all of our buses are already electric.”
Expanding to new markets
Riklin also spoke about Egged’s expansion to new markets. Egged won the tender for the Tel Aviv light rail’s Red Line, and the company that operates the line – Tevel – is owned by Egged. Riklin says, since the launch of the line, the company has been presenting high-quality data, including 98% availability.
Egged has also established subsidiaries, including Derech Egged, which transports six million passengers in Jerusalem, and Egged Real Estate, which leads acquisition deals and is responsible for the development of real estate owned by the company.
On the international level, Riklin presented data in which in 2023, Egged had overseas revenue of NIS 1 billion and in 2024 it exceeded this threshold already in the first quarter. Riklin explains that 28% of the kilometers that Egged travels are in Europe.
The network of garages operated by Egged has seen a 300% increase in revenues in the last five years, while serving not only the company’s own needs but also outside customers. The Egged Tours company also entered new areas of activity with record revenue in 2024.
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Riklin described the structural change that Egged underwent, which transformed it into a business company. Keystone Fund (TASE: KSTN) won the competitive process held as part of the change and acquired 60% of Egged at a company valuation of NIS 5 billion. Keystone is expected to increase its holdings to 75%. “During this time, we maintained a high level of service – including first place in the Ministry of Transport’s service index for the first half of 2024 with a score of 83.85,” Riklin said.
These dramatic changes were put to the test on October 7. “We then received an order to operate public transport on an emergency footing. That Saturday, more than 1,300 drivers showed up to assist in the transfer of combat units and the evacuation of residents.” Riklin added that during the war, Egged provided 1,850 transport services for soldiers, transport to Ben Gurion Airport, and other services. “It all happened when in places like Kiryat Shmona, things were undertaken under fire.”
The experience gained in the war led to conclusions. Riklin explains, “We learned then that Israel has unique needs – in addition to military, nutritional, and medical security, it also needs transport security. This area requires nationwide deployment, diversity in human capital, a supportive and independent logistics infrastructure, an emergency operation doctrine, the ability to respond to the demands of the Ministry of Defense with functional continuity – and everything needs to be done after one phone call. We provided that, but the state must provide transport security in routine and emergency situations.”
Full disclosure: The conference was sponsored by Ackerstein, CAF, Israel Railways, Netivei Israel, and Egged and with the participation of Ashdod Port and Mekorot.
Published by Globes, Israel business news – en.globes.co.il – on February 3, 2025.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2025.
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