Analysis: El Al Shabbat debate inevitable

The prospect of El Al losing its haredi clientele comes at the end of a difficult year for the company.

By
December 11, 2006 19:47
2 minute read.
Analysis: El Al Shabbat debate inevitable

el al plane 88. (photo credit: )

The prospect of El Al Israel Airlines losing its haredi clientele comes at the end of a most difficult year for the company and one that has further entrenched its status as a privatized company. Most significantly, the gloves came off earlier than expected for El Al as the government eased its aviation policy, resulting in a 20% rise in competition from foreign airlines and the introduction of a second local carrier, Israir, to the profitable New York route on a scheduled basis. Add to that the drop in tourism caused by the war in Lebanon, and the effects a weaker dollar and higher fuel costs have on the aviation industry, El Al is expected to end the year with a loss and has embarked on a program to cut staff and drop non-profitable routes. When El Al management decided to operate "emergency" flights on the Friday night of December 1, to carry passengers stranded by the previous day's labor strike, it entered a dispute with the haredi community, risking yet another shock to endure at the start of 2007. While analysts have forecast a somewhat better year for the company, it can ill afford to lose any customer at this time. "If oil stays relatively stable and given that the efficiency plan should bring real savings, 2007 should be a better year for El Al," said Yuval Zehira, a senior analyst at IBI Investments. "Still, the increase in tourism is slow and competition high, and losing the haredi market, which is between 15% to 20% of its customers, will cause major short term damage." While the timing is clearly bad, the point is certainly being made that, as a private company, El Al is entitled to decide its own policy and if flying on Shabbat makes business sense, so be it. In that sense, El Al was always going to put the issue on the table, company chairman Izzy Borovich told The Jerusalem Post shortly after taking control of the airline. Borovich stressed that no stone would be left unturned in developing a new company strategy. In the long term, the risk could prove profitable for the company for a number of reasons. Firstly, tourism may well reach its 4 million target in five years, boosted mainly by secular and non-Jewish travel, and El Al would surely be first in line to take the major share. Secondly, flying on Shabbat could be profitable in and of itself given that such a schedule best suits the business traveler aiming to arrive in time for the new working week in Israel, before Sunday. And thirdly, the haredi community may have no real alternative but to fly El Al, which will still service its needs. As El Al focuses on its short-term recovery and insists its Shabbat policy has not changed, it may have had its long-term interests in mind when it gave clearance to dispatch what it deemed emergency flights on a Friday night. While its timing may not be welcome, the debate was inevitable.


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