Open the skies

While airliner workers’ opposition to Open Skies is understandable, the gov't rightly gave more weight to greater good to society.

By JPOST EDITORIAL
El Al plane (photo credit: Courtesy)
El Al plane
(photo credit: Courtesy)
Open the skies In mid-December, just days before he was slated to fly to Brussels to sign an Open Skies agreement with the European Union, Transportation Minister Israel Katz was forced to back out.
Ostensibly, the reason for the delay was political. With a month to go before the January 22 election, argued the government, it was wrong to decide on such a crucial issue. As the Transportation Ministry put it, “Pursuant to the instructions of Prime Minister Binyamin Netanyahu, it was decided not to sign the final agreement with the EU because of the election in Israel.”
In its last days before being replaced, the government simply did not have the mandate to expose thousands of El Al, Arkia and Israir employees to competition from European airlines, including cut-rate fliers.
But the government’s legitimacy was not the only issue.
After all, a series of Israeli governments had been negotiating with the EU since 2008. In March 2012, after three years and eight rounds of talks, the sides reached an agreement and signed a memorandum of understanding.
The real reason for the delay was the reluctance of Netanyahu and others in the government to clash with the strong airline unions. Images of thousands of Israelis stranded at airports around the world or stuck at Ben- Gurion Airport were the last thing the Likud and other parties in the coalition needed on the eve of the election.
On Sunday, the new cabinet headed by Netanyahu and backed by the pro-free market Finance Minister Yair Lapid and Economy and Trade Minister Naftali Bennett, had the courage to stand up to the bullying tactics of the striking airline unions and make the right decision. The Open Skies agreement will go into effect in April.
Israeli travelers will enjoy lower flight prices and our tourism industry will receive a major boost.
From their point of view, airline employees are right to fight change. The Open Skies pact replaces all of Israel’s bilateral aviation agreements with the countries of the 27- member EU, gradually eliminating restrictions on the number of airlines that can serve a given route, on the frequency of flights, and on the capacity and type of planes that can fly.
The agreement will increase the number of foreign carriers serving Israel. The increased competition will, inevitably, push down plane ticket prices, forcing El Al and the other carriers to streamline operations. The negative effects of fairer competition will, unfortunately, include waves of layoffs or salary cuts, as well as the fostering of a working environment that is more profit oriented. Assuming he or she remains employed, the average Israeli airline worker will soon earn less.
What is the alternative? Caving in to the union sets a bad precedent. While industries from hi-tech and textiles to food production and telecommunications are exposed to robust free market forces – and consumers take full advantage of the resulting lower prices – employees of El Al, Arkia and Israir remain exempt simply because they have the power to make the lives of thousands of fliers miserable.
Open Skies, if implemented, can be a boon to the economy.
Proponents of the policy include tour guides, hoteliers, rental car companies, restaurant owners, taxi drivers and many others who could benefit directly or indirectly from a surge in tourism to Israel as a result of more affordable airplane tickets and more flights from more locations across Europe.
And Open Skies does not ignore the needs of airline employees. On several points the EU showed flexibility and took into consideration Israel’s special needs. For instance, Israel was permitted to subsidize up to 80 percent of El Al’s security costs which amount to about $100 million a year. Also, implementation will take place over five years, which is unusual for these sorts of agreements. And after two years the agreement can be reviewed to assess its impact on any given route.
While airliner workers’ opposition to Open Skies is understandable, the government rightly gave more weight to the greater good to society that will result from Open Skies. Airline employees – like port workers and Israel Electric Corporation employees – belong to a select group of unionized labor that enjoys disproportionate power because it has the ability to make Israelis’ lives miserable.
The government’s refusal to cave in to their demands was another important step toward the creation of a fairer, more competitive environment that has the potential to foster more robust economic growth and prosperity for Israeli society.