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
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
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.
travelers will enjoy lower flight prices and our tourism industry will receive a
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
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.
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.
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
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.