One of my favorite films, originally a play on TV, is Twelve Angry Men. Those of
you who’ve seen the original film in 1957 will remember that Henry Fonda played
the original dissenter in a jury trial deliberating on a homicide trial.
Originally the other 11 members of the jury voted guilty, until Fonda’s
character plants a seed of reasonable doubt, forcing the others to examine their
own values. Caustic and disconcerting, riveting and riotous as slowly but surely
one realizes that appearances can be deceiving.
So when I hear that the
CEO, chairman, comptroller and head of the unions at El Al, Arkia and Israir are
all lamenting the Open Skies agreement, all that comes to mind is Twelve Angry
Men. Bemoaning and berating that they cannot compete leaves me doubting their
The “Open Sky” agreement is an aviation agreement between
Israel and the European Union that was recently signed. In theory, it’s designed
to encourage competition among airlines and by reducing air fares, and increase
the number of European tourists visiting Israel. Conversely, it should also lead
to lower fares to more cities by more airlines for the Israeli
Negotiated over the past three years, implementation will only
commence next April and will be introduced over five years to be completed in
Championed by Tourism Minister Stas Meseznikov, who has lobbied
hard for this agreement, it was initially opposed by Transportation Minister
Israel Katz, who was eventually won over due to the agreement’s promised
His comment at the signing, asserting that he believed in the
Israeli airline managers’ ability to adapt to this new world order, brought a
smile to the face of most industry insiders. Why? Because they know that the
leaders of El Al, Arkia and Israir are quite simply incapable of making the
changes necessary to compete with the Europeans.
For example, the budget
carrier Easy Jet has made huge inroads into the Israeli market, with Arkia and
Israir unable to respond with any measure of effectiveness.
airlines tend to think short-term and react emotionally to events, with little
evidence of foresight or long-term business plans. Routes are opened, then
closed; specials are dangled in front of the public, then snatched away. Idle
when they should be busy, and busy voicing opposition, the heads of these three
airlines need to take their heads out of the clouds and put their feet on the
ground. Over-staffed and outmatched, they have good reason to be
It’s not the government’s role to protect Israeli companies in
an unfair manner. The airlines could, if they so elected, absorb the bloated
pension plans of El Al and offer early retirement packages to sharply reduce
their personnel. Employees with tenure at El Al have voiced their opinion that
with the right offer they would happily retire.
The Histadrut is
threatening strike action as this agreement comes to fruition; better they
should push for good severance pay packages combined with retraining of these
What the government does need to do is set up some
sort of mechanism to protect the flying public from the legion of airlines that
fly in and out of Ben-Gurion Airport.
A recent example provides a useful
illustration of the larger challenges of “Open Skies.”
booked a package to Rome from Sunday until Wednesday. A quick four-day jaunt,
complete with a moderate hotel, to visit the Trevi fountain, lounge at the
Spanish Steps, explore Vatican City and walk throughout the city was planned.
They booked with a travel agency, who sold them the flight and hotel with Arkia.
Arkia bought the seats for the charter from another Israeli wholesaler, that
chartered a plane from an Italian airline called Wind Jet.
with his wife and sister, showed up at Ben-Gurion Airport at the crack of dawn,
only to be met by an Arkia representative who told him that Wind Jet had gone
bankrupt overnight, and thus they could not fly him to Rome.
compensation was offered, no offer to send them on another airline was raised,
and the sleep-deprived passengers left the airport and headed home. The Arkia
representative was quite clear: the money Mr. Lemberg paid for both the plane
ticket and the hotel accommodations was lost.
The head of the Israeli
Travel Agents Association had also taken to the media to give credence to this
stand; that when an airline goes bankrupt, the consumer, and the consumer alone,
must shoulder the burden.
“What a load of crock” was my retort when
contacted that afternoon by the aggrieved passenger. While they may lose the
price of the airline ticket, Arkia’s inability to refund the price of the hotel
bordered on criminal negligence.
Speaking to Arkia employees, I was
bounced around like a piece of lost luggage until senior management agreed that
I had a valid point. Their plea that they simply purchased it from another
Israeli wholesaler was also absurd.
Their initial gambit of taking no
responsibility was infuriating.
The shiny new Open Sky agreement is
designed to be consumer friendly. By the end of the five-year period, there will
be complete competition between Israeli and the EU. Every airline will be
authorized to fly to any destination as many times as it wants.
France elects to fly Tel Aviv-Rhodes 10 times a day, it can. Obviously the
Israeli airlines don’t have the number of planes that all of the European Union
airlines have, and will have to intelligently select which routes and which
cities to invest their resources in. Obviously, Israeli airline managements will
need to review carefully their longterm strategies and the benefits they can
offer the flying public.
The Israeli government, though, must demand some
type of a bond from any airline able to fly into Israel, protecting clients from
being stranded. While we make certain that airlines that fly into Israel are
structurally safe, physically secure, why are we not concerned about their
financial stability? Over the past year, we’ve seen a Spanish airline and
Hungarian airline cease operations literally overnight.
passengers forced to pay hundreds of dollars to get back home. We’ve seen
consumers’ hard earned savings flushed away as no government protects their
The Wind Jet fiasco had an unexpected result. Its closure was the
result of a failed merger with Alitalia, but the owner of the company felt a
personal responsibility. Chartering another plane, he flew the stranded Israeli
passengers in Rome back to Israel for a nominal fee.
Mr. Lemberg called
me late in the afternoon stating that Arkia had offered him a flight at 10:30
p.m. and asked if I thought he should take it.
“I’ve already lost one day
of my four-day trip,” he explained.
Firmly reiterating what he had told
me – that Arkia informed him that his entire package was lost – I simply asked:
did he prefer to fly that evening missing one day and worry about compensation
for that amount, or to start a court process that could drag on for years? I’m
certain I heard him smiling as he asked me how early he needed to be at the
To conclude: no government, Italian or Israeli, stepped forward
to assist their stranded citizens. Private enterprise rose to the occasion. It
will be privately run, creative and innovative Israeli airlines that we will
need to compete with the Open Sky Agreement.
More often than not, I
bemoan the huge chasm between Israeli airlines and their consumers. We all want
El Al to exist; what we don’t want is for it to return to being a
government-owned airline. To all the senior management: Now is not the time to
close your eyes and pray. Now is the time to open your eyes and lead!
Feldman is the CEO of Ziontours Jerusalem. For questions & comments, email
him at email@example.com
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